In California estate and trust litigation, powers of attorney (POAs) are often central to disputes involving financial elder abuse, asset misappropriation, and breach of fiduciary duty. While POAs are intended to protect vulnerable individuals, they can be misused—with often devastating consequences.
Understanding Powers of Attorney and Fiduciary Duty
A power of attorney authorizes an agent (attorney-in-fact) to act on behalf of a principal in financial, legal, or healthcare matters. Under California Probate Code §§ 4000–4545, agents owe fiduciary duties to the principal, including loyalty and transparency.
Agents must:
- Act solely in the principal’s interest
- Avoid conflicts of interest
- Keep detailed records
- Maintain separation of assets
- Provide accountings upon request
Violations of these duties—such as self-dealing, unauthorized transfers, or concealment of assets—can be grounds for contesting the POA.
Grounds for Contesting a Power of Attorney
Contesting a POA in California typically involves one or more of the following legal claims:
- Undue Influence: The agent coerced or manipulated the principal into granting authority or transferring assets.
- Incapacity: The principal lacked mental capacity at the time the POA was executed.
- Breach of Fiduciary Duty: The agent acted in self-interest or failed to follow the POA’s terms.
- Technical Defects: The POA lacks required formalities, such as notarization or witness signatures.
Interested parties may petition the probate court to revoke the POA, remove the agent, and recover assets.
Tracing Transfers and Rolling Back Damage
When POA abuse results in asset transfers, attorneys may use several legal tools to trace and recover property.
Civil Lawsuits Under the Uniform Voidable Transactions Act (UVTA). California’s UVTA (Civil Code §§ 3439–3439.14) allows courts to void transfers made to defraud creditors or rightful heirs. UVTA claims are especially useful when assets are transferred to third parties or shell entities to evade recovery.
Elder Abuse Claims. Under the Elder Abuse and Dependent Adult Civil Protection Act (Welfare & Institutions Code § 15610.30), financial abuse claims can result in recovery of assets, attorney’s fees, and punitive damages. Courts may intervene even without a formal adjudication of the elder’s mental capacity.
Conservatorship Proceedings. If the principal is incapacitated, a conservatorship may be established to halt further abuse and unwind improper transactions.
Other Petitions for Relief. When an agent under a POA is suspected of misconduct, attorneys may file petitions to compel accountings or asking the court to remove them as agent. These proceedings often involve forensic accounting and court-supervised asset tracing.
Example of POA Misuse: Keading v. Keading
A clear example of a successful POA challenge is detailed in a 2021 opinion from the California First Appellate District. In that case, Hilja Keading challenged transactions carried out by her brother, Kenton, as agent under a POA for their father, Lewis. The court found that Kenton committed elder abuse when he took Lewis, who was in declining health, to a UPS store and had him execute a new POA naming Kenton as agent. Shortly thereafter, Kenton executed a grant deed transferring family property out of Lewis’ trust and into joint tenancy with right of survivorship between himself and Lewis.
The Court also noted that the transfer of property did not satisfy the statute of frauds, since the POA was executed by Lewis individually and the property was held in trust. Thus, Kenton’s transfer of real property exceeded the scope of authority granted by the POA.
The Court ordered Kenton to pay damages and vacate the property, and directed the successor trustee of Lewis’ trust to take possession.
Takeaways
- Powers of attorney in California can be challenged on grounds such as undue influence, incapacity, breach of fiduciary duty, or technical defects.
- Interested parties may petition the court for relief, including revocation of the POA, removal of the agent, and recovery of assets.
- Attorneys have several tools to trace and recover assets following POA abuse, including UVTA lawsuits, elder abuse claims, conservatorship proceedings, and probate petitions.
- The misuse of a POA—such as transferring property out of a trust without proper authority—can result in court intervention, invalidation of transactions, and findings of elder financial abuse, as illustrated in Keading v. Keading.
Author
Natalie Ortiz is a Senior Litigation Attorney with The Estate Lawyers, APC, in our San Diego office. She can be reached directly at Nortiz@TheEstateLawyers.com or (760) 291-4651.
Contact
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Disclaimer: This article is intended for informational purposes only and does not constitute legal advice. Reading this content does not create an attorney–client relationship. If you have questions about your specific legal situation, you should consult a qualified attorney licensed to practice in your jurisdiction. This content is provided in accordance with the California Rules of Professional Conduct governing attorney advertising and public communications.
