Senior residents and elders are progressively victims of scams. Abuses by lawyers in fact are among the worst. Elder Financial Abuse: Power of Attorney Scams – How to safeguard seniors from abuse of a power of attorney by friend or family, and how to spot this type of monetary abuse.
Financial rip-offs targeting seniors are typical. Disturbingly, a growing number of these frauds include family members, family members, or buddies who take cash from an elder when the elder grants them a monetary power of attorney. In these power of attorney frauds, the family member or buddy often claims the cash was taken for safekeeping due to the fact that the elder was senile or needed to be safeguarded from making bad financial decisions. The elder might lose their home, savings, or other cash and property through power of attorney scams.
Older Americans are susceptible to fraud and financial abuse since they frequently experience some degree of cognitive decline– through natural causes or from medications– and can have problem understanding their changing world. The Web, personal computer systems, devices with complex controls, and other indicia of modern life can accelerate disorientation of an aging mind, and elders who spend most of their time in the house can feel separated and alone. (To get more information about monetary frauds targeting seniors in general, see Nolo’s short article Elder Abuse: Financial Scams Against Elders.)
As the number of elders in the general population rapidly increases, there will likely be a corresponding boost in monetary rip-offs including an unapproved use of a power of attorney. People with elderly enjoyed ones, caregivers of seniors, and senior citizens themselves can avoid or remedy these rip-offs by discovering how they work, what steps to require to avoid ending up being a victim of a power of attorney rip-off, and what legal claims are readily available in case of a scam.
A Normal Power of Attorney Abuse Case
A case I managed years ago demonstrates how a typical power of attorney scam works. My customer, an elderly retired gentleman, lived alone with no immediate family. One day he suffered an injury that required his hospitalization. He knew he would be far from home for weeks and was fretted about paying his costs. His nephew reached the health center with flowers and an offer to help.
The next day the nephew showed up with a power of attorney, which his uncle signed. By the time the elderly guy had returned home, his nephew had robbed him blind, utilizing the power of attorney to close bank and investment accounts. Guaranteeing his uncle he was merely keeping the cash safe, the nephew had actually rather transferred the money 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 maintained that his uncle had gifted him the cash out of love and love, 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 composed permission offering a single person the legal authority to act for another person, generally relating to financial affairs like savings account and financial investments. (To find out more about powers of attorney, consisting of the various types and how to make one, see Nolo’s Financial Powers of Attorney subject.)
In the hands of someone trustworthy, a power of attorney can be a crucial tool to handle the finances of an elder who has actually ended up being permanently or temporarily unable to handle financial affairs. However, in the hands of a monetary predator or a greedy relative, a power of attorney can be used to secretly steal cash and possessions, easily bypassing the normal safeguards that are used by financial institutions.
Power of Attorney Abuse Cases: Legal Claims
If you or a liked one is the victim of fraud or financial abuse involving an unauthorized usage of a power of attorney, it is essential to act quickly. Normally, the very best course of action is to get in touch with a lawyer. The lawyer can assist you in revoking the power of attorney, requiring the return of the stolen loan and property, and, if needed, submitting a suit. (You can use Nolo’s Attorney Directory site to discover a lawyer in your area.)
The most common legal claims in a case including the abuse of a power of attorney are “breach of fiduciary responsibility” and “conversion.” Both of these claims are based upon a legal concept known as “fiduciary duty.” When an elder indications a power of attorney, it produces a fiduciary relationship between the elder (called the “primary”) and the person who is authorized to act on behalf of the elder (called the “representative”). Under this fiduciary task, the agent owes the elder a task to show the utmost good faith and commitment when acting on behalf of the elder.
Breach of fiduciary responsibility. When an elder indications a power of attorney, the fiduciary duty developed by the file enforces particular duties on the agent. For example:
u2022 The agent should keep the elder notified of things that affect the elder’s interests.
If the representative fails to act in accordance with these fiduciary duties of fidelity and good faith, the representative may be accountable for breaching (that is, breaking) the fiduciary duty.
Conversion. A representative who utilizes an elder’s possessions for his/her own benefit may likewise be liable for conversion of the elder’s property. In order to establish conversion of property, the elder (or the elder’s legal representative) needs to reveal that the offender managed or used the elder’s property in a method that was inconsistent with the elder’s rights of ownership. When the agent has utilized a power of attorney to convert the property, it must also be revealed that 1) the elder required the return of the property, and 2) the defendant declined to provide the property to the elder.
If the elder achieves success in a claim for breach of fiduciary responsibility or conversion, the court will order the defendant to return the taken property. The court or jury may also require that the defendant pay the complainant’s lawyers’ costs. And, if the accused’s conduct was especially outright or involved components of fraud, the court might award punitive damages to the elder. In the case discussed above (about the uncle and nephew), the jury awarded the uncle the complete amount of cash that his nephew stole, along with punitive damages, interest, and attorneys’ charges. Gladly, the uncle was eventually able to collect every penny of the judgment.
Preventing Power of Attorney Scams
Not all elder victims of power of attorney scams are as fortunate as the uncle in the example case. Tracing how the taken money goes from A to Z is not simple, nor is pursuing these type of suits. If you or a loved one strategies to utilize a power of attorney, take actions to protect versus frauds. Or, if you or a liked one is scammed, act quickly to correct the situation. Here’s how:
u2022 Do not give a power of attorney to anyone unless you understand the person well and totally trust him or her.
By: Craig T. Matthews, a company, employment, and litigation legal representative from the Dayton, OH location.