Q: We are suspicious that a family member is abusing/misusing their Power of Attorney designation in regard to an elderly parent’s financial decisions. Please tell me where I should start to look into this, if the POA denies our request for full financial disclosure. We are also family. What are our options, and resources? — J.P.
Answer: “If the parent will not ask for an accounting from the power of attorney (POA) agent, examine the POA, which almost certainly is on the public record at the Register of Deeds office in the county in which the parent resides,” said local attorney Mike Wells, who writes a column on legal matters for the Journal. “The POA may have a requirement that the POA agent has to account (full financial disclosure) to others if the POA agent has acted on behalf of the parent.”
Many powers of attorney documents, however, have a clause by which the principal (the parent) waives any reporting requirement, Wells said, adding “But family members should ask for it, even if it is not required.”
If the POA agent refuses to provide an accounting and is not willing to be transparent, Wells said the family members should ask the parent to revoke the agent’s authority and appoint another person.
“If the parent is not mentally competent, a guardianship proceeding (a special proceeding), can be instituted to ask that the power of attorney be revoked and that a guardian (one of the other children or an independent person) of the parent’s assets be appointed. But if the parent is mentally competent, you generally cannot keep them from knowingly making poor decisions, unless there is strong evidence of undue influence, which is often a high evidentiary bar to clear. At that point the family members’ options are very limited.”
When the parent passes away, he said, the executor of the estate of the parent can require a full accounting of what the POA agent did with the parent’s assets.
If the POA agent will not cooperate and the parent will not revoke their POA, Wells recommends that you contact the North Carolina Bar Association’s Lawyer Referral Service (800) 662-7660, which provides a 30 minute conference with an experienced elder law attorney in this area for no more than $50, hopefully with a copy of the POA in hand. “This lawyer can tell you in more detail how you should proceed, and what the financial costs will be,” he said.