Elderly people and senior citizens are progressively 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 spot this kind of financial abuse.
Financial rip-offs targeting elders are common. Disturbingly, a growing number of these scams include family members, family members, or buddies who steal money from an elder when the elder grants them a financial power of attorney. In these power of attorney frauds, the relative or good friend often claims the loan was taken for safekeeping because the elder was senile or required to be protected from making bad financial decisions. The elder might lose their house, nest egg, or other cash and property through power of attorney scams.
Older Americans are vulnerable to fraud and monetary abuse since they commonly experience some degree of cognitive decline– through natural causes or from medications– and can have difficulty understanding their changing world. The Internet, computers, devices with complicated controls, and other indicia of modern life can accelerate disorientation of an aging mind, and seniors who invest many of their time at house can feel isolated and alone. (For more information about monetary rip-offs targeting seniors in basic, see Nolo’s short article Elder Abuse: Financial Scams Versus Seniors.)
As the variety of seniors in the basic population rapidly increases, there will likely be a matching increase in financial rip-offs including an unapproved usage of a power of attorney. People with elderly liked ones, caregivers of elders, and seniors themselves can prevent or correct these rip-offs by finding out how they work, what steps to take to prevent ending up being a victim of a power of attorney rip-off, and what legal claims are readily available in the event of a scam.
A Typical Power of Attorney Abuse Case
A case I handled years ago shows how a common power of attorney rip-off works. My customer, a senior retired gentleman, lived alone with no immediate family. One day he suffered an injury that required his hospitalization. He knew he would be away from house for weeks and was fretted about paying his expenses. His nephew came to the health center 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 senior male had actually returned home, his nephew had actually robbed him blind, utilizing the power of attorney to close bank and financial investment accounts. Ensuring his uncle he was simply keeping the loan safe, the nephew had instead moved the cash to an accomplice, who in turn invested it in a mobile house 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 affection, and the power of attorney was evidence of the trust his uncle positioned in him.
What Is a Power of Attorney?
A power of attorney is a written authorization providing one individual the legal authority to act for another individual, generally regarding financial affairs like bank accounts 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 Lawyer subject.)
In the hands of someone trustworthy, a power of attorney can be an essential tool to handle the finances of an elder who has become completely or briefly unable to deal with monetary affairs. However, in the hands of a financial predator or a greedy member of the family, a power of attorney can be utilized to privately steal money and assets, easily bypassing the typical safeguards that are utilized by monetary institutions.
Power of Attorney Abuse Cases: Legal Claims
If you or a liked one is the victim of scams or financial abuse involving an unapproved use of a power of attorney, it is necessary to act quickly. Usually, the very best strategy is to get in touch with an attorney. The attorney can assist you in revoking the power of attorney, demanding the return of the stolen money and property, and, if necessary, submitting a lawsuit. (You can use Nolo’s Attorney Directory site to discover a lawyer in your area.)
The most typical legal claims in a case including the abuse of a power of attorney are “breach of fiduciary task” and “conversion.” Both of these claims are based upon a legal principle referred to as “fiduciary responsibility.” When an elder signs a power of attorney, it creates a fiduciary relationship in between the elder (called the “principal”) and the individual 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 show the utmost excellent faith and commitment when acting upon behalf of the elder.
Breach of fiduciary responsibility. When an elder signs a power of attorney, the fiduciary responsibility produced by the document enforces specific duties on the representative. For example:
u2022 The agent needs to keep the elder informed of things that affect the elder’s interests.
If the agent stops working to act in accordance with these fiduciary duties of fidelity and excellent faith, the representative might be liable for breaching (that is, breaking) the fiduciary duty.
Conversion. An agent who utilizes an elder’s properties for his/her own advantage might also be accountable for conversion of the elder’s property. In order to develop conversion of property, the elder (or the elder’s lawyer) must reveal that the defendant managed or used 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 transform the property, it needs to also be revealed that 1) the elder demanded the return of the property, and 2) the offender declined to provide the property to the elder.
If the elder achieves success in a claim for breach of fiduciary duty or conversion, the court will buy the accused to return the taken property. The court or jury might likewise need that the offender pay the complainant’s lawyers’ costs. And, if the offender’s conduct was especially outright or involved components of scams, the court may award punitive damages to the elder. For instance, in the event talked about above (about the uncle and nephew), the jury awarded the uncle the full amount of loan that his nephew stole, along with compensatory damages, interest, and attorneys’ costs. Happily, the uncle was eventually able to collect every cent 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 loan goes from A to Z is hard, nor is pursuing these type of suits. If you or a liked one plans to utilize a power of attorney, take actions to safeguard versus frauds. Or, if you or an enjoyed one is scammed, act rapidly to treat the situation. Here’s how:
u2022 Do not grant a power of attorney to anybody unless you know the person well and entirely trust him or her.
By: Craig T. Matthews, a business, employment, and litigation legal representative from the Dayton, OH location.