How to identify elder exploitation or breach of fiduciary responsibilities of a Power of Attorney

What is Elder financial Exploitation?

The Florida Department of Elder Affairs defines elder financial exploitation as “the illegal or improper use of another individual’s resources for personal profit or gain.”  This exploitation takes on many forms involving deception and/or coercion, including the improper use of a power of attorney.

What is a Power of Attorney (“POA”)?

Power of Attorney are governed by Florida Statutes, Chapter 709.  They are used to authorize another, as agent, to make financial decisions and take other actions on the principal’s behalf. Third parties, acting in good faith, may rely upon a properly executed POA to facilitate transactions the agent authorizes.  To be valid, as of October 1, 2011, a POA must comply with the following requirements:

  • (1) The agent must be a natural person who is 18 years of age or older or a financial institution that has trust powers, has a place of business in this state, and is authorized to conduct trust business in this state.
  • (2) A power of attorney must be signed by the principal and by two subscribing witnesses and be acknowledged by the principal before a notary public or as otherwise provided in s. 695.03.
  • (3) If the principal is physically unable to sign the power of attorney, the notary public before whom the principal’s oath or acknowledgment is made may sign the principal’s name on the power of attorney pursuant to s. 117.05(14).
  • 709.2105 Fla. Stat.

What may a Power of Attorney (POA) do?

Under § 709.2201, Fla. Stat., an agent exercises specific authority granted in the POA.  There are many form POA documents available via the Internet, and they provide for the agent to have many specific powers, i.e., conduct banking transactions; transfer stocks, bonds, or other securities; convey homestead property; and sell vehicles or other personal property.  While these “stock” forms may be helpful as a checklist, a POA should conform to the specific circumstances and needs of the principal using it in order to properly confer powers to an agent.

What may a Power of Attorney (POA) not do?

Because a POA is an agent, under Florida law, “an agent [generally] cannot make gifts of his principal’s property to himself or others unless it is expressly authorized in the power.”[1]  This rule caused a Connecticut court to void a transaction, under Florida law, where a POA transferred real property interests to herself and her husband.[2]  In that case, the agent alleged she was authorized to transfer the property to herself, her husband, and the decedent as joint tenants.[3] The Court said the transfer amounted to a gift that was not explicitly authorized in the POA.[4]

What can I do if I suspect fraud, abuse or neglect by a Power of Attorney?

Abuses of the elderly, including abuse through the use of a POA, may be reported to Adult Protective Services, a division of the Florida Department of Children and Families.  Additionally,

[t]he following individuals have standing to petition the court with respect to a power of attorney: (a) the principal, (b) the agent or any nominated successor agent, (c) a guardian, conservator, trustee or other fiduciary acting for the principal or the principal’s estate, (d) a governmental agency having regulatory authority to protect the welfare of the principal, (e) a person asked to honor the power of attorney, or (f) an 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.[5]

The foregoing provides a brief overview of Elder Abuse involving the use of Powers of Attorney.  If you are interested in more information or in planning to help prevent abuse for you or for a loved one, please do not hesitate to contact the lawyers at Chepenik Trushin LLP, who are experienced, ready, and willing to help. Call Bart Chepenik at 305-613-3548 or Brad Trushin at 305-981-8889 for help.

Other Sources:

Adult Protective Services, MyFLFamilies.com, http://www.myflfamilies.com/service-programs/adult-protective-services (last visited Feb. 23, 2018).

Consumer Pamphlet: Florida Power of Attorney, The Florida Bar, https://www.floridabar.org/public/consumer/pamphlet13/ (last visited Feb. 23, 2018).

[1] James v. James, 843 So. 2d 304, 307 (Fla. 5th DCA 2003).

[2] See generally Tracy v. Blake, No. MMXCV1060016185, 2010 WL 4352209 (Conn. Super. Ct. Oct. 4, 2010).

[3] Id.

[4] Id.

[5] 12 Fla. Prac., Estate Planning § 3:58, Westlaw (2017-18 ed.).