What To Do When An Agent Has Abused Power Of Attorney

Choosing to give a trusted individual power of attorney can be incredibly convenient and helpful in a time of legal need. There are many different types of power of attorney in Texas that can help individuals accomplish a vast range of legal activities. Unfortunately, it is still possible for this trusted person to act in an inappropriate manner and abuse the power that has been granted to them. It is even more likely that this abuse will occur if the individual granting power of attorney is an elder or is incapacitated.

In this blog, we’ll detail some red flags that may be signs of an agent who is abusing power of attorney, as well as the steps that can be taken to recover from the aftermath and what can be done to prevent the abuse from happening again.

Power Of Attorney In Texas

Power of attorney (POA) is a legal order that gives an individual the power to legally act on behalf of someone else. Within the agreement, the person granting POA is referred to as the “principal” and the “agent” is the person they grant it to. Anyone 18 years of age or older is eligible to serve as an agent, and the order must be signed before a notary public. There are 5 major types of POA, which are:

• General POA – this type gives the agent the authority to act on the principal’s behalf in a broad range of legal matters, as allowed by state laws. This may include things like handling bank accounts, signing checks, selling property, managing assets, or filing taxes.
• Limited POA – this type gives the agent the authority to act on the principal’s behalf in only a specific manner, or for a specific time period.
• Durable POA – this type gives the agent the authority to act on the principal’s behalf in the same way as general POA, but continues to be in effect if the principal becomes mentally or physically incapacitated.
• Springing POA – this type is the opposite of durable POA, and only gives the agent the authority to act on the principal’s behalf if they become mentally or physically incapacitated.
• Medical POA – this type gives the agent the authority to act on the principal’s behalf in decisions regarding your medical treatment if you become mentally or physically incapacitated and are unable to make them yourself.

How To Recognize Power Of Attorney Abuse

As heartbreaking as it is, even the most trusted individuals in a person’s life can act in a disappointing manner and abuse the power that’s been granted to them. The person who agrees to be an agent takes on a fiduciary duty that requires them to act in the best interests of the principal and keep accurate records of what they do, therefore, abuse of POA is considered a breach of fiduciary duty. These duties include the duty of care, loyalty, good faith, confidentiality, prudence, and disclosure.

Because there are different types of POA that serve different purposes, there are many different ways that an agent can abuse their power. The most common type of abuse is financial, and entails acts such as elder abuse, exploitation, embezzlement, forgery, fraud, and theft. Some examples might include stealing or spending money, identity theft, selling personal information, or making large, unauthorized purchases or sales.

In addition, an agent could abuse their power in other ways. According to the U.S. Department of Justice, POA infractions usually fall into one of the following four categories:

• The agent has committed acts of a self-dealing nature
• The agent has exceeded their scope of authority
• The agent has deviated from the principal’s expectations
• The POA document was forged

If you feel that your agent – or the agent of a loved one – has violated one or more of their fiduciary duties or committed an act that falls into one of the above categories, it does not automatically mean that they are trying to take advantage of you. It is possible that they are simply not taking the POA order seriously or have made a one-time mistake. But if you have noticed a pattern of dishonesty or the omission of important information, then they may be abusing the trust and confidence that you have placed in them.

Steps To Take After Suspecting Or Discovering The Abuse

If you are the principal in question and believe you are being violated by your agent, the crucial first step you should take in the face of POA abuse is to seek the aid of an experienced estate planning attorney who can immediately revoke the order. However, if you suspect a loved one’s abuse and they are currently incapacitated, it may be more difficult to revoke the document. You should still consult with a knowledgeable attorney first, as well as report the suspected abuse to Texas Adult Protective Services. 

Your attorney will then be able to help you determine what legal options are available to you to try and recover the money or property that was lost, as well as any damages that were incurred. They will be the best source of information as to the steps to serving justice and helping the principal financially, legally, and emotionally recover.

How To Prevent The Abuse From Happening Again

There are several methods of prevention that one can use to make sure POA abuse does not happen again. Some may be:

1. Being more judicious about the agent you choose. Trust is a key factor in the process. While it does seem wise to choose a person who has financial or legal experience, those skill sets won’t amount to much if you can’t trust them. You should also avoid choosing anyone with financial problems, addictive behavior, relationship problems, legal problems, or a history of deceitful behavior.
2. Include safeguards that limit the actions your agent can perform, or that require them to perform regular accounting of their transactions and provide them to a family member or 3rd party.
3. Consider creating a trust as a beneficial alternative to granting POA.

Trust Villegas Law Firm To Offer Effective Guidance In Your Time Of Need 

The Villegas Law Firm, led by attorney Jorge Villegas, is ready to step in if you suspect an agent is abusing their power. We can take the necessary steps to end the order and help you navigate the clean-up of the damage that has been caused. Call today to schedule your free consultation and let us help you protect what matters most.