Elderly people and senior citizens are significantly victims of scams. Abuses by lawyers in fact are amongst the worst. Elder Financial Abuse: Power of Attorney Scams – How to secure seniors from abuse of a power of attorney by friend or family, and how to identify this type of monetary abuse.
Financial frauds targeting seniors prevail. Disturbingly, a growing variety of these frauds include family members, family members, or pals who steal cash from an elder when the elder grants them a monetary power of attorney. In these power of attorney rip-offs, the relative or pal frequently claims the cash was taken for safekeeping since the elder was senile or required to be safeguarded from making bad monetary decisions. The elder might lose their home, savings, or other cash and property through power of attorney scams.
Older Americans are susceptible to scams and financial abuse since they typically experience some degree of cognitive decrease– through natural causes or from medications– and can have trouble comprehending their shifting world. The Internet, desktop computers, home appliances with intricate controls, and other indicia of modern life can accelerate disorientation of an aging mind, and seniors who invest the majority of their time at house can feel separated and alone. (For more information about monetary frauds targeting elders in basic, see Nolo’s article Elder Abuse: Financial Scams Against Elders.)
As the number of elders in the basic population rapidly increases, there will likely be a corresponding increase in monetary rip-offs including an unapproved use of a power of attorney. People with elderly loved ones, caregivers of elders, and elders themselves can avoid or fix these scams by discovering how they work, what actions to require to prevent ending up being a victim of a power of attorney fraud, and what legal claims are readily available in the occasion of a scam.
A Normal Power of Attorney Abuse Case
A case I handled years ago demonstrates how a normal power of attorney scam works. My client, an elderly retired gentleman, lived alone with no immediate family. One day he suffered an injury that required his hospitalization. He understood he would be away from home for weeks and was stressed over paying his bills. His nephew got to the medical facility with flowers and a deal to help.
The next day the nephew appeared with a power of attorney, which his uncle signed. By the time the elderly male had actually returned home, his nephew had robbed him blind, utilizing the power of attorney to close bank and investment accounts. Assuring his uncle he was simply keeping the loan safe, the nephew had rather moved the cash to an accomplice, who in turn invested it in a mobile home development in South Carolina.
When the uncle took legal action against, the nephew kept that his uncle had talented him the cash out of love and affection, and the power of attorney was evidence of the trust his uncle placed in him.
What Is a Power of Attorney?
A power of attorney is a written authorization giving a single person the legal authority to act for another individual, typically regarding monetary affairs like savings account and investments. (To get more information about powers of lawyer, including the various types and how to make one, see Nolo’s Financial Powers of Lawyer topic.)
In the hands of someone trustworthy, a power of attorney can be a crucial tool to handle the finances of an elder who has become permanently or briefly unable to manage financial affairs. In the hands of a financial predator or a greedy family member, a power of attorney can be used to secretly take loan and assets, easily bypassing the regular safeguards that are used by financial institutions.
Power of Attorney Abuse Cases: Legal Claims
If you or an enjoyed one is the victim of scams or monetary abuse including an unauthorized usage of a power of attorney, it’s essential to act quickly. Normally, the very best strategy is to contact a lawyer. The lawyer can help you in revoking the power of attorney, demanding the return of the stolen cash and property, and, if needed, submitting a lawsuit. (You can use Nolo’s Attorney Directory to find a lawyer in your area.)
The most common legal claims in a case involving the abuse of a power of attorney are “breach of fiduciary responsibility” and “conversion.” Both of these claims are based upon a legal principle understood as “fiduciary task.” When an elder signs a power of attorney, it creates a fiduciary relationship in between the elder (called the “primary”) and the person who is licensed to act on behalf of the elder (called the “agent”). Under this fiduciary responsibility, the agent owes the elder a responsibility to act with the utmost excellent faith and loyalty when acting upon behalf of the elder.
Breach of fiduciary task. When an elder signs a power of attorney, the fiduciary responsibility produced by the file imposes specific responsibilities on the agent. For example:
The representative needs to keep the elder notified of things that impact the elder’s interests.
If the representative fails to act in accordance with these fiduciary duties of fidelity and great faith, the agent might be responsible for breaching (that is, breaking) the fiduciary duty.
Conversion. A representative who utilizes an elder’s assets for his or her own advantage may also be liable for conversion of the elder’s property. In order to establish conversion of property, the elder (or the elder’s lawyer) must reveal that the offender handled or utilized the elder’s property in a way that was inconsistent with the elder’s rights of ownership. When the agent has actually utilized a power of attorney to convert the property, it should likewise be shown that 1) the elder demanded the return of the property, and 2) the offender refused to deliver the property to the elder.
If the elder achieves success in a claim for breach of fiduciary duty or conversion, the court will purchase the accused to return the stolen property. The court or jury might also need that the accused pay the plaintiff’s attorneys’ charges. And, if the defendant’s conduct was especially outright or involved components of fraud, the court may award compensatory damages to the elder. For instance, in the case discussed above (about the uncle and nephew), the jury granted the uncle the total of money that his nephew stole, in addition to compensatory damages, interest, and lawyers’ costs. Gladly, the uncle was ultimately able to collect every penny of the judgment.
Preventing Power of Attorney Scams
Not all elder victims of power of attorney scams are as lucky as the uncle in the example case. Tracing how the stolen cash goes from A to Z is hard, nor is pursuing these sort of suits. If you or a liked one plans to utilize a power of attorney, take steps to protect against scams. Or, if you or a liked one is scammed, act rapidly to treat the scenario. Here’s how:
Do not give a power of attorney to anybody unless you know the individual well and totally trust him or her.
By: Craig T. Matthews, a business, employment, and litigation lawyer from the Dayton, OH area.