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Child Promises Elderly Mom A Dream And Delivers A Nightmare Removal Of Power Of Attorney Agent

Child Promises Elderly Mom A Dream And Delivers A Nightmare Removal Of Power Of Attorney Agent

Sometimes abuse can come from those closest to you even if they are named to act in their capacity as a fiduciary. A person acting as a fiduciary (such as an agent under a power of attorney, a trustee of a trust, a guardian or as an executor) should be someone you trust to act in your best interest.

Last year a Tarrant County court determined a daughter should be removed as agent under her mother’s power of attorney as a result of her breach of fiduciary duty.

In June 2019, Trudy, 84, signed a financial statutory power of attorney naming her daughter, Linda, as her agent (although Trudy had already been diagnosed with dementia). At the same time, she signed a medical power of attorney naming her daughter, Dianna, as her agent. Whether Trudy had sufficient mental capacity to sign either document is questionable as no legal document should be signed if the person fails to understand what they are signing. Dianna lived rent free in a home owned by Trudy although she later moved into Trudy’s home.

A few months later, Dianna had Trudy sign a deed to Dianna of the property that Trudy had previously allowed her to live rent-free. Adult Protective Services later determined this was financial exploitation.

Shortly thereafter in June 2020, Dianna had her mom, Trudy, sign a new power of attorney naming Dianna as the agent (instead of Linda). Then, Dianna took control over some of Trudy’s bank accounts, Social Security payments and credit cards.

In July 2020, Trudy’s son, Kyle, applied for guardianship as he alleged Dianna had taken a “significant portion” of Trudy’s assets as evidenced by the deed of the property to Dianna and that she was either in the process of selling the home deeded to her or getting a loan against it. He later amended his pleading to request Dianna be removed as the agent under the financial and medical power of attorney signed in 2020 (since Trudy lacked capacity to sign) since she breached her fiduciary duty.

The court concluded Trudy, who moved to a nursing home, needed guardianship. Dianna testified at the trial that she intended to stay at Trudy’s home until Trudy recovered or passed away. Trudy’s money was enough to pay the utilities for Dianna.

The court also concluded that Dianna should be removed as agent under both documents since she breached her fiduciary duty owed to Trudy. The court further demanded an accounting from Dianna.

There are several ways to determine if one has breached fiduciary duty, including:

  1. Misappropriation of Assets
    If you take assets that are not yours and use them for your own benefit that would be a breach of fiduciary duty. So, if Dianna took funds from Trudy’s accounts to pay for Dianna’s bills, then that would be a misappropriation of assets resulting in the breach.
  2. Conflict of Interest (Duty of Loyalty)
    A fiduciary is supposed to put the interest of the one for whom you are acting ahead of your own. Did Dianna act in Trudy’s best interest or did she act in Dianna’s best interest? Dianna had a duty of loyalty to her mother, Trudy.
  3. Self-dealing
    If you take an action transferring assets of someone else to yourself to the detriment of who you represent, then that would be self-dealing.
  4. Negligent Management of Assets
    The fiduciary must act with a level of care and skill that a reasonable person would.
  5. Failure to Account
    Fiduciaries are required to keep adequate records and let the person for whom you are acting or the court know what you have done when taking care of the assets of another person.

    During the trial, there was testimony that Dianna (1) used Trudy’s credit cards for her own benefit; (2) could not account for what certain checks were used to pay for; (3) used funds to pay a Petroleum Club account although Trudy couldn’t go there; (4) hired a law firm to defend her in the guardianship proceedings (even though they also represented Trudy) and she paid only $1500 of the $60,000 legal fee bill (Trudy’s funds paid the balance); (5) checks were signed as if Trudy, but were not in Trudy’s handwriting; and (6) Dianna lived in Trudy’s home rent free.

    The court stated if only one of these actions were proven, then there is a cause for removal for breach of fiduciary duty. Since Dianna admitted she lived in Trudy’s home rent-free, she was removed as agent and there was no need to determine if the other allegations were correct. Dianna may have told Trudy she would take care of her, but it was clear that Dianna did what was best for Dianna and not for her mom resulting in a costly legal battle and her removal.

If interested in learning more about this article or other estate planning, Medicaid and public benefits planning, probate, etc., attend one of our free upcoming Estate Planning Essentials workshops by clicking here or calling 214-720-0102. We make it simple to attend and it is without obligation.



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