A power of attorney (“POA”) can be an important tool for both elders and caregivers to ensure that the elder is safe and properly cared for during their lifetime. One of the main characteristics of a POA is that, if the document was properly executed, nobody can override the grantor’s decisions as stated in the POA (healthcare, financial, general, etc.). One of the most important decisions a grantor makes when creating a POA, is who to name as their “attorney-in-fact.” This designation is crucial because the attorney-in-fact is authorized to act on the grantor’s behalf in whatever manner the POA designates.
As circumstances and people change, a grantor may want to alter the powers given in a POA, the attorney-in-fact to whom the power is given, or both. Further, if a grantor loses the capacity to make these decisions for themselves, and the attorney-in-fact takes advantage of the grantor’s incapacity, concerned family and friends may want to intervene to protect the grantor. This article examines how: (1) a mentally competent grantor may revoke a POA; and (2) concerned family or friends could intervene where a grantor is incapacitated and the attorney-in-fact fails to act in the grantor’s best interest.
The only person who can revoke a POA is the grantor who created it (court intervention is discussed below). The requirements for revoking a POA are generally the same requirements needed to create one. While these requirements vary state by state, generally, the following are necessary:
The revocation must be in writing and should explain that the grantor is of sound mind and wishes to revoke the POA. It is best to be as specific as possible when describing the POA one wishes to revoke. Give the date of the original POA as well as the name of the attorney-in-fact whose powers are being revoked.
Signature of Grantor
The grantor must also sign the revocation. While most states do not require a notary’s signature, this is always a good idea as it can protect against legal attacks concerning the validity of the revocation.
It is crucial that the grantor have the mental capacity to execute a POA and/or a revocation. Generally, the grantor must understand what they are signing, and the effects of the document signed. The grantor must also act on their own accord, without undue pressure from anyone else to act.
As discussed above, these requirements vary by state. For example, some states require that you sign the POA in front of two disinterested witnesses, while others require that you record your POA and revocation at your local recorder of deeds office. For this reason, it is crucially important that you speak with an attorney in your state before creating or revoking a POA to ensure compliance with your state’s laws.
It is also wise to send the revocation to the attorney-in-fact whose powers are being revoked and to have them return the old POA to the grantor. The grantor will want to destroy the old POA and any copies. Further, the grantor should inform any person or institution to whom a copy of the POA was given that the POA has been revoked and that the attorney-in-fact no longer has the power to act on the grantor’s behalf It would also be prudent to provide these institutions with a copy of the revocation.
Court Intervention and Revocation
Unfortunately, situations may arise where the grantor no longer has the mental capacity to revoke a POA, but it may be in their best interest to do so. While an attorney-in-fact is legally required to act in the grantor’s best interest, that does not always happen. Under these circumstances, concerned family members and other individuals may petition the court to intervene and revoke the POA. Litigation can be a costly, lengthy, and emotionally taxing process. Therefore, it is important to consult an attorney to understand your circumstances, the laws, and the procedures of your state before moving forward with a lawsuit.
Standing to Petition the Court
A person must have “standing” to petition the court to act in some manner. “Standing” is the “right of people to challenge the conduct of another person in a court.” Each state determines who has standing. However, to protect elders who are vulnerable or incapacitated from physical or financial abuse, states usually grant standing to broad categories of persons, including:
- A guardian, conservator, or other fiduciary acting for the grantor;
- A person authorized to make health-care decisions for the grantor;
- The grantor’s spouse, parent, or descendant;
- An individual who would qualify as a presumptive heir of the grantor;
- A person named as a beneficiary to receive any property, benefit, or contractual right on the grantor’s death or as a beneficiary of a trust created by or for the grantor that has a financial interest in the grantor’s estate;
- A governmental agency having regulatory authority to protect the welfare of the grantor;
- The grantor’s caregiver or another person that demonstrates sufficient interest in the grantor’s welfare; and
- A person asked to accept the POA.
Common Methods to Challenge POA
When one of the following above-listed individuals decides to challenge the POA in court, they must allege a reason for the trial court to revoke the POA. Below are some common methods of challenging a POA in court.
- State Law Not Followed
If a grantor fails to follow their state’s law when creating a POA, the trial court may revoke it. For example, perhaps the grantor lives in a state where two disinterested witnesses must observe the grantor signing the POA, but the grantor signed in front of only a notary. Under such a challenge, the trial court may invalidate and revoke the POA.
- Grantor Capacity
Perhaps the most litigated issue concerning a challenge to a POA is whether the grantor possessed the required mental capacity to create a POA. As discussed above, the grantor must understand what they are doing and the effect of the POA. The process of proving that the grantor did not have the proper mental capacity can be complicated. To challenge a POA on this ground, the petitioner may have to present medical records and testimony from physicians and other mental health experts, which demonstrate that the grantor was incapacitated when the POA was created. The court may also want to hear testimony from family members and other witnesses concerning the grantor’s mental status at the POAs creation. If the court determines the grantor did not have the mental capacity to create a POA, the court may revoke it. Similarly, if a court determines that a grantor was unduly influenced by another individual when making the POA, the court may revoke it.
- Attorney-in-Fact Misconduct
A court may also revoke a POA where it determines that the attorney-in-fact is not acting in the grantor’s best interest and/or if the attorney-in-fact is physically or financially abusing the grantor. An attorney-in-fact is tasked with acting reasonably and in the grantor’s best interest. When an attorney-in-fact steals the grantor’s assets or mismanages them, makes important decisions that are not in the grantor’s best interest, or otherwise fails to meet their fiduciary responsibilities, they are not performing to their required standards. Similarly, any attorney-in-fact who emotionally or physically abuses a grantor is obviously not acting within the grantor’s best interest. Click here for information concerning elder abuse, including the signs of elder abuse and neglect.
Anyone who alleges misbehavior by the attorney-in-fact will have to prove: (1) the attorney-in-fact’s actions; and (2) that the actions are not in the grantor’s best interest. The petitioner will likely have to provide the court with evidence of malfeasance, such as financial and/or medical records as well as testimony from relevant witnesses.
Spouses and POAs
A spouse cannot override a POA (although they can challenge it in court). However, if one spouse has executed a POA giving a third-party power over their financial matters, the attorney-in-fact’s authority is limited to managing the grantor’s personal, separate assets. The attorney-in-fact’s powers do not usually carry over into marital property, which is jointly owned by both spouses. In short, the spouse who did not execute the POA maintains the right to use and manage the marital property as they please.
Social Services and POAs
Social service agencies are also unable to override a POA, although such an agency would likely have standing to bring a suit to revoke the attorney-in-fact’s powers. However, if an attorney-in-fact has a limited POA that only applies to, for example, financial matters, it is possible that social services could intervene on the grantor’s behalf concerning their physical or emotional wellbeing.
Guardianship vs. POA
Generally, if a grantor has created a POA that gives an attorney-in-fact general powers over the grantor and their affairs after the grantor’s incapacitation, there is no need for a guardianship. A guardianship is created when a court determines that an individual has become incapacitated and are unable to manage their affairs. The court will appoint a guardian over the incapacitated individual, also called a ward, to manage the ward’s affairs. This is not necessary when a POA is in effect because the POA determines who will serve as the attorney-in-fact and manage the grantor’s affairs after incapacitation. Of course, any individuals with concerns regarding the attorney-in-fact’s behavior may petition the court to revoke the POA and appoint a guardian over the grantor.
It is also important to note that if the grantor created a POA that was not durable, but instead terminated upon the grantor’s incapacitation, the court could appoint a guardian for the individual. Similarly, a guardianship could override a POA if the POA was created after the grantor lost the mental capacity, discussed above, to create a POA.
Consulting an Attorney
If you or a loved one have questions concerning revoking a POA or petitioning a court to do the same, it is important for you to consult with an estate planning attorney to review your options.
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