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.