Types of Power of Attorney
Before discussing how it can be potentially abused, we outline the three main types of power of attorney below:
General Power of Attorney. A general power of attorney gives broad powers to a person or organization to act on someone’s behalf. These powers include handling financial and business transactions, buying life insurance, settling claims, operating business interests, making gifts, and employing professional help.
This power of attorney is an effective tool for those anticipating being out of the country and need someone to handle certain affairs, or when they are physically or mentally incapable of handling them themself.
Durable Power of Attorney. This holds the same abilities as general power of attorney, but remains valid even when the principal is incapacitated. This tool can also be used to prepare for the possibility that someone can become incompetent due to an illness or injury, but cannot go into effect until a doctor confirms the principal is mentally incompetent.
Limited Power of Attorney. If someone is not entirely confident with giving a single person or organization the authority to take charge of a broad range of tasks, they may be given a limited power of attorney.
An example of this is instead of granting the agent authority to handle all transactions concerning real estate, they are only authorized them access to only one specific property.
Potential Abuse
There are several possibilities of wrongdoing when someone is given influence in a power of attorney relationship. One of the most common instances where agents abuse their power is changing the beneficiaries. If they choose to change the beneficiary account titles, the original heirs will be left with very little should the principal pass away.
Breach of fiduciary duty occurs when an agent engages in transactions that do not correspond with the interests of the principal, such as failing to provide proper medical care for the principal or the agent is found to be self-dealing.
Lastly, abuse of power of attorney can be observed when the agent misappropriates funds or retitles accounts. This is commonly seen when dealing with life insurance, bank accounts, and pay on death accounts.
Contact Our Team Today
If you suspect power of attorney abuse, challenging it alone can be extremely frustrating. At Adrian Philip Thomas, P.A., we have the experience you need to advise you of your options and assist you in your case.
To schedule a free consultation with our team, do not hesitate to contact us today through our website or give us a call at (954) 764-7273!