A financial power of attorney is a document that is executed by a principal giving a person known as an agent or attorney in fact, the ability to manage the principal’s financial affairs. The terms of the power of attorney define the scope of the agent’s powers and can grant very broad and expansive powers to the agent. These powers can be abused.
Financial Power of Attorney abuse frequently occurs when the agent does not act in the best interests of the principal and engages in financial mismanagement of the principal’s assets. Some examples for financial mismanagement are transferring the principal’s assets to the agent, selling or transferring the agent’s property for inadequate consideration, gifting of the principal’s property without authority, and using the power of attorney to change the testamentary disposition of the principal’s estate.
Stopping abuse by the agent or attorney in fact became easier January 1, 2018. North Carolina expanded the ability to stop an abusive agent. An “interested person” may now petition the Clerk of Court to compel an accounting from the agent or for the removal, suspension, or limitation of the authority of the agent and may also petition the court to hold an agent liable for breach of fiduciary duty under N.C. G. S. § 32C-1-117(b)(2).
In addition to the new provisions of Chapter 32C, actions for financial fraud by an attorney in fact can be brought in civil court to recoup damages from the abusive agent. Donna Savage has extensive experience with the prosecution of such claims against the abusive agent.