Power of Attorney Abuse

Protecting the integrity of an Estate

One of the most underserved topics in law is Power of Attorney abuse. Power of attorney abuse or “POA” abuse occurs frequently and is often unexpected.

In fact, most heirs claim to have had close relationships with the bad actor inflicting the abuse, prior to learning that the abuse had taken place. The good news is there are laws in place to protect rightful heirs to ones Estate.

POA abuse occurs when an agent or attorney in fact is not acting in the best interest of the principal. It is often difficult to differentiate POA abuse from financial elder abuse as the two often occur together and are closely interrelated.

POA abuse can include fraud, forgery, theft, misrepresentation, self-dealing, misappropriation, and breach of fiduciary duty. An example of POA abuse would be as follows: Principal appoints his son as agent to manage financial affairs during a time when she is receiving hospice care for a terminal illness. Son changes beneficiary designations on all bank accounts, titles and deeds giving all assets to himself excluding siblings and all other named heirs from his mothers Estate and/or Will or Trust immediately before his mothers death. A time when the principal is most vulnerable or legally incapacitated. Tell, tell signs of POA abuse in this case include coercion, the agent paying for the changes to be made or taking the principal to the agents attorney. Although, the POA that the principal executed provided the agent/son with general financial powers, it did not expressly provide the agent with the ability to give himself assets or change beneficiary designations allowing the allocation of assets to be inherited solely to himself. The above-mentioned abuse is the most common form of Elder Abuse represented in the letter of the law.

A POA’s argument that the principal divulged assets through oral submission is contrary to the law and has been proven inadmissible.

Section 404.714.1 RSMo of the Durable Power of Attorney Act States: An attorney in fact who elects to act under a power of attorney is under a duty to act in the interest of the principal and to avoid conflicts of interest…. A person who is appointed an attorney in fact under a power of attorney, either durable or not durable, who undertakes to exercise the authority conferred in the power of attorney, has a fiduciary obligation to exercise the powers conferred in the best interests of the principal, and to avoid self-dealing and conflicts of interest, as in the case of a trustee with respect to the trustee's beneficiary or beneficiaries; and in the absence of explicit authorization, the attorney in fact shall exercise a high degree of care in maintaining, without modification, any estate plan which the principal may have in place, including, but not limited to, arrangements made by the principal for disposition of assets at death through beneficiary designations, ownership by joint tenancy or tenancy by the entirety, trust arrangements or by will or codicil.

Missouri courts have consistently held that an attorney-in-fact is prohibited from making a gift or gifts of the principals property to himself, unless the DPOA contains expressly written authorization allowing for such provision. See Randall, 497 S.W.3d at 854-55 ; In re Estate of Lambur, 397 S.W.3d 54, 64 (Mo. App. 2013) ; and Herbert v. Herbert, 152 S.W.3d 340, 353 (Mo. App. 2004). “Whether the attorney-in-fact has oral authorization from a principal to make a gift to himself … is irrelevant.” Lambur, 397 S.W.3d at 64 ; Herbert, 152 S.W.3d at 353 (held that § 404.710.6 overruled prior opinions holding that a principal’s oral authorization is sufficient for the attorney-in-fact to make gifts to himself).

The prohibition against an agent’s actions encompasses more than “gifts” in the traditional sense. Agents are also prohibited from taking any action that would result in a principal’s assets eventually becoming the agent’s unless the language of the DPOA expressly allows it. See Herbert, 152 S.W.3d at 353-54 (adopting a black letter rule that an attorney-in-fact may not transfer the principal’s assets to a joint account which will become the sole property of the attorney-in-fact unless there is written authorization in the DPOA for the attorney-in-fact to make gifts to himself); see also Lambur, 397 S.W.3d at 64-65 (held that a fiduciary under a DPOA may not create a “gift” to himself by depositing the principal’s money into a bank account that is jointly owned with the attorney-in-fact, who has a right of survivorship).

POA abuse of an elderly person may constitute a variety of white-collar crimes or violate deceptive trade practices laws under Missouri or federal laws.

There are ways to protect your loved ones.

1.Become more involved in your loved one's life especially as they age and become more vulnerable.

2. Report suspected abuse to law enforcement or Missouri's elder abuse hotline.

3. Attend biennial review meetings as a family with the principal so you can become familiar or better acquainted with the principal's desire. Do so more frequently when necessary. Request to record the meetings.

4. Contact an Estate Planning Attorney to discuss legal options including filing a lawsuit if you suspect fraud or foul play.

Jace Kentner regularly writes and speaks on various legal topics including estate planning, probate and elder law. He formed Kentner Law LLC, in 2001. He has two Missouri offices: 107 W 9th st 2nd floor-#0449 Kansas City MO. 64105 and

4625 Lindell Blvd 2nd Floor-#2373 St. Louis, Mo 63108

Mr. Kentner earned his juris doctorate degree from Drake University School of Law in 1996 where he graduated Phi Alpha Delta. While at Drake Mr. Kentner also served as Editor for Drakes Law journal. After law School Mr. Kentner went on an obtained his Masters in Health Services Administration. During undergrad Mr. Kentner attended Missouri State University where he also graduated with honors. You may find him at www.Kentnerlaw.com or (573) 708-7870 or on Facebook or LinkedIn