How To Approach Power of Attorney Abuse
When the Iowa legislature passed the Uniform Power of Attorney Act (UPOAA), the purpose was to create a framework that the average person could understand when drafting a power of attorney. This allowed people to avoid the need for lengthy court conservatorships and make their financial and medical powers of attorney on their own.
Another purpose of the Act was to identify, prevent, and provide quick remedies for any abuse of a power of attorney. Power of attorney abuse extends beyond the life of the principal in the relationship and into probate. If the agent is found to have abused their authority in a way that impacts the estate, the heirs have legal recourse against the agent.
- An agent may be terminated immediately if they are named in an abuse report regarding the principal’s financial resources
- An agent may be terminated immediately if they are convicted of abuse related to the principal’s financial resources
- Any interested person may petition the court for an agent conduct review if they suspect the power of attorney is being abused.
- After probate, heirs may file tortious interference claims against an agent for abuses that occurred during the life of the principal.
Abuse and misuse of power of attorney over financial affairs are taken very seriously by the courts, and there are several legal claims that can be filed against such an individual. Arenson Law Group, PC has the experience to help resolve your case, contact us today to learn how we can help.
One of the most common claims during an estate dispute is that of undue influence. Undue influence is defined in Iowa as “pre-death manipulation, persuasion, or control of a testator’s intent to convey assets” for the influencer’s personal gain.
Unscrupulous agents may act in several ways to gain influence over the principal. One common tactic is taking control of assets under the guise of helping care for the individual and then being named as an agent to facilitate their use of assets.
To prove undue influence in court, a plaintiff must show that the victim was vulnerable, the agent acted with apparent authority, the agent intended for the outcome, and that the agent received an “inequitable gift.” In a probate case, this might mean the testator left their house to the agent rather than the family.
Undue influence may also be demonstrated by the presence of other tortious acts. If you have questions that need immediate answers, contact us now.
Breach of Fiduciary Duty
A power of attorney creates a fiduciary relationship between the principal and the person chosen as the agent. In most cases, the principal is unable for some reason to handle their own finances, and the agent is entrusted with managing them. If the agent has used their position for their own profit or fails to provide an accounting to heirs after probate, they have breached their duty.
Theft by Conversion
Conversion is a legal term for taking the property of another and using it as your own. In a power of attorney case, conversion can include bank accounts, real estate, personal property, and anything of value.
Fraud usually consists of financial misappropriation or deception. When a fiduciary misrepresents their access to funds, lies about the amount of funds available, or overstates the reason for their use of funds, they are committing fraud.
How to Combat Power of Attorney Abuse
Heirs and beneficiaries can help prevent power of attorney abuse by taking an active role in the principal’s life. Most power of attorney abuses occur when the principal is older or isolated from their family. If a family member has mentioned granting a power of attorney to another person, here are some things you should do to protect your family and assets.
- Choose the agent carefully. Don’t always go with a close friend or relative. It might be better to have a disinterested stranger or a professional fiduciary. Take your time and review your choices thoroughly before deciding. Don’t be embarrassed to do a background check.
- Notify all financial agencies. Whether this is for yourself or a dependent adult, contact your financial agencies and let them know who the agent is and what their specific duties as power of attorney are. Ask to be notified if the agent strays outside their assigned role. Have accounts flagged for sudden large transfers or withdrawals.
- Ask for an estate accounting. Many people have lost valuable family heirlooms and memorabilia to untrustworthy fiduciaries. Money is fungible, but property is not. If you or your relative have items you don’t want to lose, create a list, and make the agent liable if anything goes missing.
How an Attorney Can Help
Most importantly, contact an attorney at once if you suspect any breach of fiduciary duty or other abuse. Don’t confront the agent and then expect anything to change. A judge has the authority to remove an agent upon suspicion of power of attorney abuse. Don’t wait until things have progressed.
Although an agent can be sued after probate has closed, you cannot always recover stolen property or the full amount of the loss. If you believe your family member is being financially abused by their power of attorney, or there was undue influence in the writing or execution of the will, contact the Cedar Rapids estate planning lawyers of Arenson Law Group, PC at (319) 363-8199.
Five Common Estate Planning Mistakes
Likely one of the top estate planning mistakes is not making a plan. But if you’re reading this, you understand the benefits of planning your estate and want to avoid some of the common pitfalls that may create challenges for your beneficiaries.
The Cedar Rapids estate planning lawyers of Arenson Law Group, PC have decades of experience and can help you develop your will, trusts, charitable bequests, and powers of attorney to protect your rights and your estate. These are five of the most common mistakes we see people make. If you have pressing questions, don’t hesitate to contact us immediately.
Properly Name Your Beneficiaries
This is an easily overlooked mistake when you set up a retirement plan, or you’re switching investment companies. Adding a beneficiary to the account helps the money avoid probate and pass directly to the beneficiary. When an account has a properly listed beneficiary, it can override what’s in the will or a living trust.
Another mistake is naming an individual who will still be a minor when you die as a beneficiary. Minors do not have the legal authority and so must have a court-appointed guardian to supervise and manage the assets. To avoid this mistake, you can name the guardian for a minor child in your will.
Take care as you are considering and naming your beneficiaries that you have the right names and contact information. When a person’s name legally changes, such as after a marriage or divorce, make the necessary changes to the legal documents.
Estate Planning Is More Than Making a Will
The last will and testament might be the most well-known part of estate planning documentation, but it’s not the only piece of the puzzle. There are several tools and strategies you can use to ensure that your assets are distributed effectively and the way you want them to be.
Estate planning includes working with your financial advisor and accountant, discussions with your family, and developing a plan with your estate planning attorney. Some planning documents may have nothing to do with asset distribution but are still part of your estate plan. For example, you may designate powers of attorney, have a living will, and appoint guardianships and conservatorships.
Secure Your Documents
Your estate plan is only effective if people know where the documents are and can access them. For example, let’s say you develop a strong relationship with your neighbor, and you care for him through his illness. He intends to leave you something in his will but does not put his will in a place where his family knows where to find it.
After his death, no one can locate the documentation, so his estate will go through the state, which will distribute his assets to his nearest living relatives, and you’ll get nothing. When you do your estate planning, be sure your documents are stored in a safe place and your executor and attorney have copies. Keep a copy in a safe deposit box, which can be found and accessed after you die. Should you need to know more, reach out to Arenson Law Group, PC today.
Don’t Keep Secrets
One of the most difficult things for your family to deal with after your death is to learn that the contents of your will are not what they anticipated. It’s crucial that you make your feelings known to your executor and your beneficiaries before you die.
If you feel that your wishes could cause conflict with your family or your beneficiaries, explain in a letter why you made your decisions and send it to each of the beneficiaries so everyone is operating with the same information. This may help reduce or eliminate disputes after your death.
Don’t Forget …
Estate planning is not a “set it and forget it” legal document. With every major life event, the estate plan needs to be updated. If your goals change or public policy changes, your estate plan must be updated. For example, wills, trusts, and powers of attorney are driven by state law. If you move to a new state, these documents must be updated, or they will not be executed after your death.
It’s crucial that you do not forget to plan for potential disability or long-term care as you create your estate plan. Another mistake people make is failing to update their beneficiaries on things like retirement accounts and insurance policies. These beneficiary forms are legally binding documents. Even if you change your will, failure to update your beneficiary forms means that your assets may go to someone from your past. Also, don’t forget to consider estate taxes and the impact of income taxes on you and your beneficiaries.
Contact Arenson Law Group, PC Today for Your Estate Planning Needs
It’s easy to overlook some of the small changes in your estate plan that can have a large impact on your beneficiary. When you work with the legal team at Arenson Law Group, PC, our experienced estate planning attorneys will help answer your questions and ensure that your assets are distributed efficiently, and to the beneficiaries you select.
What Is Guardianship?
Guardianship is a legal relationship the court establishes giving the guardian authority and a duty to care for another person, who is called “the protected person.” Guardianships can also be created to care for a property. There may be alternatives to creating a guardianship, depending on your situation. These include powers of attorney, living will or trust, and health care surrogacy.
When a guardianship is created by the court, it removes only the rights the protected person is incapable of handling. These rights can include consent to medical treatment, end-of-life decisions, voting, and marriage. Establishing guardianship requires due process of law to protect the rights of the protected person. We strongly recommend the services of an experienced Cedar Rapids guardianship attorney. They can help navigate the complex legal system and protect your rights. If you have pressing questions, reach out to Arenson Law Group, PC today. We can help.
When Is a Guardian Appointed?
Under normal circumstances, parents have the right to decide for their children and adults have the right to make decisions for themselves. However, in some circumstances, this may not be possible. When someone needs to step in to care for a child or an adult, the court may appoint a guardian.
For example, a guardian may be appointed over a child’s estate if the child inherits assets. This can protect the assets until the child reaches adulthood. Guardianship may also be appointed if an adult is incapacitated. The guardian then makes healthcare and financial decisions until the protected person recovers or the guardian helps guide end-of-life decisions.
In the case of an adult, the court must determine they are incompetent and unable to make decisions for themselves. The law defines incompetence to help protect your rights. For example, a guardian may be appointed for:
- An adult who is mentally disabled after their parents have passed
- An adult who becomes mentally or physically disabled after an accident
- An adult whose chronic substance abuse renders them incapable of taking proper care of themselves, their family, or property
What Does a Guardian Do?
A guardian can have several responsibilities. These can include consenting to and monitoring medical treatment. Individuals who are incapacitated may have a guardian appointed to them to make medical decisions. This includes decisions about prescription medications, surgical interventions, and other medical treatments.
Guardians also monitor non-medical services, like education, counseling, and living arrangements. In the case of medical treatment, a guardian is needed to consent for the release of confidential information. The guardian maximizes the protected person’s independence in the least restrictive manner possible. They are responsible for reporting the status of guardianship to the court.
A court-appointed guardian for real and personal property has different responsibilities. These include getting appraisals, protecting assets, receiving income, and making the appropriate disbursements.
The goal of guardianship is to restore the rights of the individual after due process. In some cases, guardianship may be for a lifetime. This might happen if an individual is significantly injured and subsequently unable to care for themselves. The court does an annual review and assessment to determine whether the guardianship should be maintained.
Types of Guardianship
There are multiple types of guardianships the court can appoint. Guardianship of a minor child may be the first type you think of, but there are others to consider. There are three basic categories of guardianship.
Full guardianship is a legal relationship in which full responsibility and decision-making are granted to the guardian for the benefit of the protected person. Full responsibility can include guardianship over finances, personal affairs, and legal issues. A limited guardianship gives the guardian responsibility for specific needs for the individual, such as healthcare. Finally, joint guardianship can be a full or limited guardianship responsibility that is given to more than one guardian.
The court can appoint guardianship over a minor child or an elderly person. This is sometimes called elderly conservatorship. When an adult is unable to care for themselves or make decisions, legal guardians can be appointed when a person is unable to make their own health care decisions.
Individuals may appoint guardianship for their pets in a living will or trust after they pass. This can include money for the care of the pet. Legal conservators, also called financial guardians, manage financial assets for the protected person.
Contact Arenson Law Group, PC for Help with Guardianship Issues
Guardianship issues can be complex. The court appoints an adult they believe is the best choice to make the right decisions for the child, adult, or personal property disbursement. However, if you believe the appropriate decisions aren’t being made, or your loved one is not being cared for the way you believe they would want, you have options.
Contact the experienced and knowledgeable Cedar Rapids guardianship attorneys of Arenson Law Group, PC. Our legal team has had decades of experience in the community and can help you sort through the legal issues involved in guardianships. Call our office today at (319) 363-8199 to schedule your initial consultation.