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Crossing the line–When a Power of Attorney agent goes too far

| Apr 9, 2020 | Elder Law, Estate Planning |

A Durable Power of Attorney (“DPOA”) is an essential estate planning document in Florida. Having one allows you to appoint an agent who can act on your behalf on personal, business, and financial matters. This instrument can be especially important for persons who are elderly, incapacitated, or are seriously ill.

Imagine an elderly person who is hard of hearing, has some dementia or confusion, and has a hard time getting around. They need help with basic things like paying bills, filing insurance, etc. If they have established a DPOA, they can designate a loved one or friend who can help with these tasks. The DPOA gives the person designated the authority to act on the principal’s behalf. Without the DPOA, the elderly person would have to handle these on their own or to at least be present when someone acts for them.

However, establishing a DPOA is not without some risk. In Florida, a DPOA is immediate—meaning that the agent can use it even if the principal is not yet incapacitated. Florida previously allowed for a “Springing POA” which only applied if the principal become incapacitated. However, in 2011, the Springing POA was statutorily eliminated. As a result, in Florida you can no longer have a Springing POA. So there is some risk of abuse if the person appointed is not trustworthy.

On some occasions, an agent may misuse the DPOA. The agent may misappropriate assets or funds or otherwise act in a way that is not in the principal’s best interests. An agent under a DPOA is a fiduciary and has a duty to act in the principal’s best interest—but sometimes an agent may overstep his or her bounds. The agent may cross the line and not act in the principal’s best interest. When that happens, what can be done?

If the principal still has his or her capacity, one step would be to revoke the DPOA. Accomplishing this is done in writing stating that the DPOA is revoked. The revocation should be signed by the principal in front of two attesting witnesses and a notary. Revoking the DPOA won’t fix prior acts by the agent but it will stop the agent from taking further action. However, if the principal does not have capacity, court intervention may become necessary. Sadly, there are no “DPOA police” and as a result, often a civil court action is the only mean of enforcement.

Under Section 709.2116, Fla. Stat., a “court may construe or enforce a power of attorney, review the agent’s conduct, terminate the agent’s authority, remove the agent, and grant other appropriate relief.” So if the agent is misusing the power given to them, a court action may be filed seeking to have the court review the agent’s action, and if necessary, terminate or remove the agent.

But if the principal lacks capacity, he or she may not be able to bring such an action. In fact, the principal might not even understand that the agent is overstepping his bounds. So who may file such an action on behalf of the principal? Who has authority to do this? The following persons may petition a court to review an agent’s actions and to terminate or remove the agent:

(a) The principal or the agent, including any nominated successor agent.

(b) A guardian, conservator, trustee, or other fiduciary acting for the principal or the principal’s estate.

(c) A person authorized to make health care decisions for the principal if the health care of the principal is affected by the actions of the agent.

(d) Any other interested person if the person demonstrates to the court’s satisfaction that the person is interested in the welfare of the principal and has a good faith belief that the court’s intervention is necessary.

(e) A governmental agency having regulatory authority to protect the welfare of the principal.

(f) A person asked to honor the power of attorney.

Bringing this type of lawsuit requires an attorney who has experience not only in estate planning but also in handling cases in court. In fact, many estate attorneys will not get involved in this type of litigation because it is out of their expertise or they do not like to go to court. Before pursuing this type of case, find out if the attorney you’re speaking to has experience in fiduciary litigation.

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