POWER OF ATTORNEY DISPUTES
April 6, 2020
A power of attorney provides authority to an attorney-in-fact, or agent, to act in specific ways on behalf of the principal who created the document. Texas has several different POA options that grant the authority when the principal becomes disabled or incapacitated. These include actions related to financial matters, assets and real estate, as well as medical decisions.
Some family disputes arise because an aging parent chooses one child over the others to serve as the agent. Other times, it becomes apparent to everyone that the choice was a mistake because the agent is abusing the authority in some way.
When this happens, people may challenge the validity of the durable power of attorney. Some must turn to litigation to stop the agent from neglecting, mismanaging or even stealing the principal’s assets.
The Validity of The Power of Attorney
Texas has specific requirements for creating a durable power of attorney. If the principal has not met any one of these, family members may challenge the authority of the agent.
The principal must be of sound mind, meaning he or she understands what the document is and the effects signing it will have. If the principal is incompetent when he or she drafts and signs the document, it is not valid. The principal must also be at least 18 years old.
A notary public must be present when the principal signs the power of attorney. An unnotarized document is not valid.
Texas has a prescribed form for power of attorney, but people may use other forms if they wish. Most forms include lists of types of decisions the agent may make, and the principal chooses which ones he or she wants to grant the agent power to make. However, the principal can add powers not already on the form he or she uses.
Abuse of Authority
An agent must make every decision based on the interests of the principal. Agents should not ever take money or assets from the principal and place them in their own accounts or transfer ownership to themselves. While it is possible for an agent to do this innocently, it is often the sign of an intentional breach of fiduciary duty.
An agent does not have the authority to change the principal’s will. Also, unless the principal named that individual to be the executor of the estate, an agent may not act on the principal’s behalf after death.
Anyone acting as an agent may officially decline the role at any time. However, no agent has the authority to name a replacement or allow an unauthorized person to perform the power of attorney duties.