Does this scenario sound familiar?
“My sister has power of attorney over my mother. Lately, she’s been taking expensive vacations, paying for spa services, and carrying a designer purse that seems beyond the reach of her own income. I’m concerned she’s skimming from mom’s bank account.”
If so, your sibling may be abusing their power of attorney.
You and your family members set up a power of attorney to prevent bad actors from taking advantage of an older parent. What do you do if the person supposed to be acting in the best interest of a parent… isn’t? Keep reading to find out:
What Is Power of Attorney and Why Would I Need One?
Power of attorney (POA) is a legal document that allows someone else, known as an “agent”, to act on the behalf of the signer, known as the “principal”, to act on their behalf in legal, financial, medical, or other matters. As a child of an aging parent, you might seek a POA if your parent is sick, recovering from an injury, or does not feel comfortable handling their own financial affairs. You and your parent can structure the POA can be as permissive or restrictive as needed.
What Are the Types of POA?
Generally, the two main types of power of attorney under Texas law are:
- A durable or financial power of attorney is generally used to make plans for the care of the finances, investments, and property of the principal in the event the principal is no longer able to handle their financial affairs. It applies only to financial matters and can be helpful to older adults who want and need a trusted person to act on their behalf.
- A medical power of attorney is a legal document that allows the principal to designate a trusted adult to make certain health care decisions for the principal. Medical power of attorney usually only takes effect when the principal is unable to make their own health care decisions, and this is certified in writing by the principal’s physician.
Examples of Power of Attorney Abuse
An agent acting under a power of attorney has a responsibility and duty to act in the best interests of the principal. If your mother or father appointed your sibling as an agent, your sibling has a legal obligation to fulfill that duty. If they breach their duties, they may be found liable in court to the principal for damages and other legal remedies.
Examples of power of attorney abuse may include:
- The agent treats the principal’s bank account like their own or commingles funds
- The agent makes questionable financial decisions or fails to act in the principal’s best interests
- The agent purchases a life insurance policy and names themselves as the beneficiary
- The agent changes existing life insurance beneficiaries
- The agent makes changes to the will
- The agent transfers power of attorney to someone else
- The agent purchases real estate “for” the principal and includes themselves on the title
- The agent makes unauthorized gifts to themselves (or to other individuals or charities)
- The agent steals the principal’s property
- The agent uses the principal’s credit cards without permission
- The agent steal’s the principal’s identity or establishes credit under the principal’s name
Signs and Symptoms of Power of Attorney Abuse
Most people notice POA abuse when they see abrupt and inexplicable changes in the agent’s lifestyle. Your brother, for example, may suddenly be able to afford a new car. You may also see your sibling act contrary to your parent’s stated instructions, like your sister putting your mother in a nursing home despite the fact she asked for at-home care.
Adults with bad financial habits or debts, or an unstable relationship with other siblings, may not be a good choice to serve as the POA agent for a parent. They may feel entitled to their parent’s money or property, especially if they are also serving as caretakers, and keeping the rest of the family at bay.
If one sibling has POA, the family should agree to check in on their parents – and communicate about their parent’s financial situation – regularly. This promotes transparency and can help prevent conflict. The agent is not legally required, however, to share financial information with you. It may be frustrating, but it is not an abuse of power.
You do have the right to visit your parent and ask questions. If your sibling tries to prevent you from seeing your parent, seek legal help immediately.
What Is the Penalty for Abuse of Power of Attorney?
If an agent abuses their POA, they can face civil and criminal consequences. If your sibling stole from your parent, for example, they may need to pay the money back (civil consequences) and be charged with theft or elder abuse (criminal consequences).
People who abuse POA may also be disinherited from the principal’s estate.
How Do I Prove Power of Attorney Abuse?
Generally, financial records will show if power of attorney abuse has occurred. An attorney can help you obtain those records legally and guide you through the next steps.
What Are My Options if I Suspect a Sibling Is Abusing Power of Attorney?
If you suspect financial abuse by a family member acting as power of attorney, contact a probate litigation attorney to discuss and assess your legal options.
Most power of attorney disputes can be handled through negotiated settlements or mediation before a lawsuit is ever filed in civil court. An attorney can help you revoke or amend the power of attorney, and work to recover missing assets or money.