ATTORNEY NEWSLETTER
Financial Powers of Attorney and the Elderly
Potential for Misuse
Financial elder abuse can strike seniors from various directions including from those whom the senior has trusted with a Power of Attorney (POA) over financial matters. A financial POA is an important legal document where a principal authorizes an agent to act on the principal’s behalf in business transactions and more.[1] Someone with a financial Power of Attorney has legal authority to transfer money, pay bills, sell a home or other assets, and complete other financial transactions unless the Power of Attorney expressly limits the agent’s power. Unfortunately, the appointed agent may take advantage of any broad authority and act for the agent’s own benefit. The results can be devastating. The Marin and California financial elder abuse lawyers at Evans Law Firm, Inc. represent seniors and their families who suffer loss when agents misuse financial Powers of Attorney. If you or a loved one has suffered from an agent’s misuse of a POA, call us today at (415)441-8669. California law awards attorneys’ fees and costs to principals whose agents have breached their fiduciary duty under POAs. Cal. Probate Code § 4545(b).
Here are a few signs that an agent may be misusing a financial Power of Attorney:
- The principal is being neglected. Maybe utility bills aren’t being paid on time, tax payments are late, or other important bills are left unpaid.
- Care expenses are ignored. Late payments and cancelled services may indicate that the principal’s money is not being spent on the principal but is being diverted by the agent.
- The agent is making unauthorized payments to himself or herself. Under California law, an agent under a Power of Attorney is entitled to reasonable compensation for services. Calif. Probate Code § 4204. However, the principal may limit the power of the agent to make any payments to himself and the provisions of the Power have priority over the statute on compensation. Calif. Probate Code § 4101.
- The agent has embezzled money from the principal’s bank accounts or caused a benefit like Social Security to be paid to the agent.
- The agent is making gifts or creating or amending a trust agreement without express authority to do so. California law requires express authority for the making of gifts or creation or revocation of trusts by POA agents. Calif. Probate Code § 4264. Trusts can only be modified or revoked by an attorney-in-fact if permitted under the original trust instrument. Calif. Probate Code § 4264(a).
- Sudden, significant changes are made to financial and estate planning arrangements. The agent may suddenly appear as a pay on death beneficiary on bank accounts, accounts may be switched to joint accounts, or the agent opens new accounts that only he or she can access or may even know about.
- The agent prohibits visits and calls by family and friends. Or, if the elder receives visitors, the POA agent may routinely hover around to hear what is said. Attempts at isolation and control are always red flags.
An unscrupulous agent under a POA can ruin a senior’s life. Seniors need to be extremely careful in selecting their POA agents. Because POA powers are so broad, our lawyers recommend principals appoint two or more trusted individuals, so that the agents must always work jointly on matters concerning the principal. Seniors should never grant such authority to strangers, and be highly cautious with caregivers, financial advisors, or even family members who suddenly develop an interest in the senior’s financial or personal affairs and suggest themselves as a POA. Never grant a Power of Attorney to a caregiver. Ask a professional to prepare the Power and have them tailor the power exactly to the authority you wish to grant and under what circumstances the power should spring into effect. A professional can also draft Advance Health Care Directives and Medical Powers of Attorney for you as well.
Contact Us
If you believe that you or a loved one has suffered Power of Attorney abuse or other forms of financial elder abuse here in Marin or elsewhere in California contact Ingrid M. Evans and the other California elder abuse attorneys at the Evans Law Firm at 415-441-8669 or by email at info@evanslaw.com. Our attorneys have experience with complex financial contracts, such as annuities and life insurance, and large insurance companies and cases involving Powers of Attorney, trusts, wills, and other legal instruments. We can help guide your case through a jury trial or toward an equitable settlement. We handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.
[1] There are also powers of attorney over medical decisions known as Advance Health Care Directives, and these are equally powerful in the appointed agent’s hand. A Power of Attorney may be “springing,” meaning that it comes into force only when the principal is incapacitated or unavailable, or “durable,” meaning that it is effective at all times until revoked or upon the death of the principal. Powers of Attorney are sometimes referred to as “mandates” or as “letters of authorization.”
