When Can A Power of Attorney Be Contested?

Individuals who hold power of attorney (known as “agents” or “attorneys in fact”) are capable of exercising an enormous amount of authority over every aspect of their principals’ lives, including all financial, medical, housing, and care matters. Under a typical power of attorney relationship, the agent is capable of making decisions on behalf of the principal on the same basis as if the principal had made those decisions himself or herself, including buying and selling property, operating businesses, and pursuing claims in litigation, among other powers. As such, it is not uncommon for other interested parties (typically the principal’s family members) to contest power of attorney when they believe that the agent is committing power of attorney fraud. If you suspect power of attorney fraud or other financial elder abuse, a California power of attorney fraud lawyer can assist you. 

Duties of Agents

Agents are bound by a fiduciary duty to their principals and their principals’ assets. This generally means that the agent must act in good faith and in the best interest of the principal while avoiding self-dealing. Under California law, agents are subject to the duties to: 

• Act solely in the interest of the principal and void conflicts of interest
• Avoid transactions in which the agent herself may have a personal stake
• Keep the principal’s property separate and distinct from other property
• Keep in regular contact with the principal and follow his or her instructions
• Consult with the principal’s spouse, physician, attorney, accountant, and family members should the principal become incapacitated and no longer be able to give instructions. 
• Keep detailed records of all transactions.
• Provide an accounting of transactions upon request or as indicated in the power of attorney. 
• Promptly deliver possession and control of the principal’s assets upon termination of the power of attorney.

Any breaches of this fiduciary duty may be grounds to contest the power of attorney. \

Examples of Power of Attorney Abuse 

While the duties imposed on agents by statute are not particularly onerous on their face, the authority granted to agents under power of attorney can easily be abused. For example, power of attorney abuse could occur where: 

• The agent steals assets from the principal 
• The agent uses the principal’s assets for personal gain
• The agent commingles his or her personal assets with the principal’s assets 
• The agent disobeys direct instructions in the power of attorney 
• The agent makes unnecessarily risky or reckless transactions 
• The agent fails to keep records of transactions 
• The agent fails to maintain the principal’s assets in a reasonable manner
• The agent exceeds the scope of their authority, such as by making gifts or changes to the principal’s will 
• The agent transfers power of attorney to someone else 

These breaches of fiduciary duty can have serious and long-term financial impacts on principals and their families. If you are aware of power of attorney abuse, please contact a California power of attorney fraud lawyer to discuss your options for remedies. 

Grounds to Contest Power of Attorney 

The good news for those who suspect that power of attorney abuse is occurring is that power of attorney is not necessarily set in stone. There are several grounds on which concerned family members may contest an agent’s power of attorney.

Errors in Execution

Establishing power of attorney in California is simple, and it is not uncommon for power of attorney documents to lack the necessary formalities. For example, for power of attorney to be durable in California, it must contain specific language to that effect. Power of attorney documents must also either be notarized or signed by two witnesses. These errors and others can render the power of attorney void. 

Incapacity of the Principal

Only individuals having the capacity to contract may execute a power of attorney. This means that the person must be able to understand the decisions they are making and the powers they are granting. If a power of attorney is executed while the principal is incapacitated — such as by age or a mental health condition — the power of attorney may be void. 

Unfitness of Agent

Just as principals must have the capacity to execute a power of attorney, so too must agents have the capacity to act as attorneys-in-fact. Agents must also be “fit” for the job; a caregiver with no financial experience is not fit to run a senior’s finances.  Never, ever, grant a financial power of attorney to a caregiver. If an agent who had the capacity to act loses it, the agent’s lack of capacity may be a ground to contest the power of attorney. However, the agent’s lack of capacity does not relieve them of their duties to the principal or the principal’s successors. 

Undue Influence 

Power of attorney obtained by an agent through undue influence may be used as a ground to contest power of attorney. This could occur, for example, where the agent abuses a position of power to coerce the principal into granting them power of attorney. To prove undue influence in California, the challenger must show: 

1. The victim had a particular vulnerability (i.e., mental illness, age, isolation, dependency, etc.) 
2. The influencer had apparent authority over the victim 
3. The influencer exercised power over the victim
4. An inequitable result

A California power of attorney fraud lawyer can help you gather the necessary evidence to prove undue influence. 

Breach of Fiduciary Duty 

As discussed above, an agent’s breach of fiduciary duty is a ground to contest power of attorney. The most effective way to prove a breach of fiduciary duty is to show that an agent failed to act in accordance with the power of attorney. For example, if a power of attorney prohibits the agent from making certain types of investments and the agent does so anyway, those investments likely would be considered a breach of fiduciary duty. 

Contact a California Power of Attorney Fraud Lawyer for Help Contesting a Power of Attorney 

Contesting power of attorney can be difficult, but it is not impossible. It requires extensive documentation of the alleged abuse or breaches of fiduciary duty and sound legal arguments as to why renovation of the power of attorney is in the principal’s best interest. Your best chances of success in contesting a power of attorney, therefore, are with the assistance of an experienced attorney. To get started, please contact a California power of attorney fraud lawyer at the Evans Law Firm, Inc., by using our online contact form or calling 415-441-8669 or toll-free at 1-888-50EVANS (888-503-8267).