What to Do When Power of Attorney Goes Wrong

This article provides information on what can be done when power of attorney goes wrong. Learn about guardianship and conservatorship procedures, types and requirements for powers of attorney, and more.

What to Do When Power of Attorney Goes Wrong

Giving a power of attorney to another person grants them considerable authority over your finances and assets. If this power is abused, the victim of the abuse may need to seek help from the government or the courts to recover money, property, or other assets. This article provides information on what can be done in such a situation. In general, two different types of legal action can be taken to undo the damage caused by a dishonest power of attorney. If the person who created the POA is still alive, a guardianship or conservatorship procedure is usually needed to appoint a decision maker.

It is important to know whether you want a durable or regular power of attorney when creating such a document. A durable POA remains in effect even if the principal becomes incapacitated, while a regular POA does not. On the other hand, a permanent general power of attorney allows the principal to appoint an agent to manage their personal and financial affairs in case of incapacity. There are certain situations where it may be necessary to cancel an existing power of attorney and sign a new one. In New York, Title 15 of Article 5 of the New York General Obligations Act establishes a “short statutory power of attorney” by which a person can appoint an agent to act on their behalf in personal and financial matters.

If granted, guardianship voids durable general powers of attorney and the newly appointed conservator is responsible for managing and protecting the finances of the incapacitated person. California has specific rules about types and requirements for powers of attorney. Any party that receives a POA executed on the new form has ten days to accept or reject it in writing, stating their reasons for refusal. When signing as a power of attorney for someone else, it is important to be aware that you are legally signing on their behalf. An Advance Health Care Directive (HCAD) is a type of POA that allows an agent to manage health decisions in case the principal becomes incapacitated.

A person who in good faith accepts a recognized and witnessed POA without actual knowledge that the signature is not genuine can rely on the presumption that it is genuine. Once the principal is deceased, the authority granted to the agent under the POA ends.