Contesting a Power of Attorney
Granting power of attorney to another person or entity gives the designated representative the authority to make legal decisions on behalf of another. It is meant to be a protective tool in the event an individual can’t speak or make decisions for himself or herself due to illness or disability. A power of attorney (POA) may be broad or narrowly drawn, but POAs are typically established to address financial and healthcare decisions.
Granting a power of attorney to a trusted family member, friend or institution is meant to ensure your wishes are carried out if you cannot exercise control over your finances or medical care for one reason or another.
However, when a power of attorney does not act in the principal’s best interests and the incapacitated principal is unable to revoke the authority, other family members or interested parties may challenge that POA in a California court.
The estate litigation attorneys at Albertson & Davidson, LLP help individuals and families in California work through disputes and, when necessary, challenge powers of attorney in court. Let us review your situation with you and discuss whether a lawsuit to invalidate a power of attorney is appropriate in your case. Call (877) 227-5366 today to reach a power of attorney contest lawyer.
Why Grant Power of Attorney
A power of attorney is a tool to be considered when planning for the long-term care of an individual or an estate. It is a handoff of decision-making authority if and when such assistance becomes necessary.
Many people establish POAs to provide an agent authority over their finances or healthcare or both if they become incapacitated. A POA may be a general power of attorney or limited power of attorney.
General vs Limited Power of Attorney
A general power of attorney authorizes acting on behalf of the individual in all matters, as allowed by California. A limited power of attorney allows the agent to act in specific matters and should explicitly state the agent’s duties and responsibilities. A limited POA may be valid only for a specified period of time, such as while the principal plans to be out of the country or unavailable to perform tasks.
Durable vs Nondurable Power of Attorney
POAs are also known as “durable” and “nondurable” powers of attorney. A durable power of attorney authorizes continued control of legal, property, financial or healthcare matters as spelled out in the agreement after the principal becomes mentally incapacitated. Nondurable powers of attorney are automatically revoked if the principal becomes physically or mentally incapacitated.
In estate planning, which includes making plans for an individual’s future incapacity, all powers of attorney are established as durable. In California, a power of attorney becomes a conditional or “springing” power of attorney by including the phrase: “This power of attorney shall become effective upon the incapacity of the principal.”
With a power of attorney in place, the agent can immediately step in and make any decisions the principal would have made if he or she had not been incapacitated.
But even a durable power of attorney is limited to making decisions on behalf of the principal while he or she is alive. Upon the principal’s death, their affairs are managed by the executor of the estate. These distinct roles may be held by the same person or entity, but they require separate filings with the court.
Requirements of a POA in California
The agent or attorney of fact in a POA should be someone the individual trusts to make decisions that align with what he or she would want.
The California legislature has created separate forms for establishing a general financial power of attorney and a healthcare power of attorney. The forms must be signed by the principal and two witnesses, and the financial POA form must be signed before either a notary public or an attorney.
The person acting as power of attorney is required to keep records of each transaction made under the POA. In addition, any family member or other interested party can ask to see the records or accounting of how the principal’s finances are being handled, and the agent is required to comply.
Under California law, it is a breach of the agent’s fiduciary duty to fail to keep adequate records of transactions. If an interested party alleges that records are inadequate, the agent has the burden of proving in court that he or she is doing a proper job.
Contesting a Power of Attorney in California
It is important to establish powers of attorney when you, as principal, are of sound mind and decision-making ability. You should choose someone you fully trust to understand your wishes and to carry them out along with the other responsibilities of the POA. This is usually a spouse, adult child, close friend or business partner, but may be an entity such as a trust, corporation or governmental agency.
A power of attorney wields authority that may be easily abused if in the wrong hands, particularly if the authorizing document grants access to the principal’s money and other assets. In other cases, the power of attorney in fact is simply not living up to the responsibilities of the POA agreement.
The principal in a power of attorney agreement can submit forms to the court at any time to alter the agreement. If, as is often the case, the principal is incapacitated, an interested third party can petition the court to invalidate a power of attorney. This, however, requires submitting evidence that persuades the court that invalidating the POA is in the principal’s best interest. The agent must be informed and will be given the opportunity to defend his or her actions.
Typically, a challenge to a POA asserts one of three reasons for the court to alter the legal agreement:
- Undue Influence
This alleges that the agent obtained a power of attorney through some contrivance that convinced that principal to act against his or her own best interests. Undue influence refers to a situation in which one person uses their position of power to take advantage of another person, such as by persuasion, threats or coercion.
California law considers it to be undue influence if a person acting in bad faith manipulates the free will of anyone aged 65 or older to persuade the elder to give them money, houses or other property.
Establishing undue influence requires proving four elements:
- Vulnerability of the victim. This might be diminished mental condition under an existing POA, but could also include vulnerability due to illness, injury, disability, age, education, impaired cognitive function, emotional distress, isolation or dependency.
- Apparent authority of the wrongdoer, i.e., status as a fiduciary, family member, care provider, health care professional, legal professional, or spiritual adviser.
- Actions and tactics of the wrongdoer, or how they controlled and manipulated the victim.
- An inequitable result, i.e., acquisition of the POA or improper acquisition(s) through the authority of the POA. For example, the court may consider a divergence from the victim’s prior intent and/or the appropriateness of the POA in light of the length and nature of the relationship.
It is important to understand that proof of an inequitable result alone is NOT sufficient to establish undue influence.
- Abuse of Authority
This alleges that the agent is making decisions or taking actions that are not in the principal’s best interest. Often the claim is that the agent is using the authority granted by the POA for their own gain or other unjust ends. Abuse of authority might include:
- Stealing from the principal’s assets
- Mismanaging the principal’s assets
- Breach of fiduciary duty, i.e., failure to keep adequate records
- Neglecting the principal’s needs
- Failure to fulfill duties specified by the POA.
- Technical Mistakes in the POA
Because it is relatively easy to establish powers of attorney in California, it is not unheard of for some documents to lack one or more of the formalities required to establish a binding POA. The agreement may be challenged if it lacks:
- Specific language required by California law.
- Specific language authorizing the principal’s actions.
- Proper witnesses and signatures.
In most cases, powers of attorney are not subject to oversight by the court or a third party. If the principal is incapable of monitoring the agent’s actions, this lack of oversight makes it easy for someone to abuse the authority granted by a broadly written power of attorney agreement.
The aggressive lawyers at Albertson & Davidson fight to protect the inheritance of individuals who have been harmed by the abuse of power of attorney agreements throughout the State of California. Our in-depth knowledge of trust, estate, and probate matters makes us powerful adversaries when you need to stop a power of attorney of fact who is abusing the authority granted by a POA.
Our litigation team has appeared in courts throughout California and has the necessary resources and experience to have one or more POAs invalidated. We are prepared to take your case to trial, if necessary, to achieve your desired results.
Contact Us About Contesting Powers of Attorney
If you have reason to question a powers of attorney agreement in California, your first call should be to the experienced power of attorney contest attorneys at Albertson & Davidson, LLP. We can advise you on your options and represent you in court. We have offices in Los Angeles (El Segundo), San Diego, Carlsbad, Redwood City, Irvine and San Francisco. Please call us at (877) 227-5366 today or contact us online.