Power of Attorney Abuse in Florida: Legal Remedies for Victims and Their Families

Dealing with probate litigation and administration, we frequently observe how poor estate planning and/or unscrupulous family members destroy the intentions of a decedent and ultimately cause fall out among the remaining family members. One tool we commonly see abused in Florida is the power of attorney document.

This article is meant to provide a brief overview of the power of attorney document and the statutory mechanisms by which an injured beneficiary or estate may bring a cause of action to recover from unlawful deeds.

Let’s use an example to illustrate the point. John Smith has two children: Jack and Jill. Jill takes care of John, and Jack lives out of state. To facilitate John’s care as he gets older, Jill obtains a power of attorney and conducts John’s financial affairs, including paying bills and managing investments and property.

John passes away and leaves a will devising everything in his estate to his two children Jack and Jill in equal shares. Jill has used all her father’s assets and the estate has no assets. Jack does not believe this could happen and wishes to hold his sister, as the power of attorney, responsible for all the actions taken in her role as a power of attorney.

¿Qué es un poder notarial?

In basic terms, this is a document that enables someone to delegate important decisions regarding financial affairs and medical decisions. In Florida, the document becomes operational as soon as it is effectuated. The grantor of the power is called the “Principal,” and the recipient who is charged with the task of carrying out the affairs is called the “agent.”

In a perfect world, the document allows the person delegated by the power of attorney document (called an attorney-in-fact) to carry out the affairs of the designator so their financial affairs and other affairs can continue. When used properly, these documents provide an excellent source of management and ease of life for those dealing with incapacity issues or major medical events.

This article is not meant to provide a guide on the creation or execution of these documents; for more info, see our website section on power of attorney. Instead, today we will focus on the dark side of power of attorney documents: the abuse of the power of attorney and what the injured parties can do in Florida to hold the wrongdoers accountable.

Florida’s Statutory Framework for Power of Attorney Protection

The State of Florida provides a statutory scheme laying forth some of the requirements for an “agent” meaning the person who accepts the responsibility under a power of attorney to act on behalf of someone else. The rights and responsibilities and some drafting requirements are contained in Florida Statute, chapter 709. We will discuss some of those provisions here.

Who Can Challenge Power of Attorney Abuse

Who may challenge the actions of an “agent”? Pursuant to Florida Stat. 709.2116(2), the following parties have standing to petition the court:

• The principal, a guardian, conservator, trustee, or other fiduciary acting for the principal or the principal’s estate
• A personal representative authorized to make health care decisions (only to the extent that the decisions were affected)
• A governmental agency
• Any other interested party if the person demonstrates to the Court’s satisfaction that the person is interested in the welfare of the principal and has a good faith belief that the Court’s intervention is necessary

This broad standing provision means that family members, beneficiaries, and other concerned parties often have legal recourse when they suspect abuse. The challenge is particularly important when dealing with complex estate planning situations involving asset protection strategies.

Fiduciary Duties and Record-Keeping Requirements

Fla. Stat. 709.2114 provides that an agent is a fiduciary and therefore must always act for the benefit of the grantor, in accordance with the expectations of the grantor. Further, this provision requires that records be maintained of all receipts, disbursements and transactions made on behalf of the principal.

These are two very important requirements. We often encounter family members who believe that the designated agent of a decedent took money for themselves to the detriment of the estate or other beneficiaries under an estate plan. This provision provides that under Florida Law, an agent who personally takes the principal’s assets and does not use them solely for the principal’s benefit (i.e. takes it for him or herself) has breached a fiduciary obligation.

Additionally, the agent must keep an accurate record of all transactions made. Consequently, if indeed an agent has stolen money from an account, Florida law empowers a challenger to obtain an accounting of the records and importantly, they were required to have been kept for every transaction made.

This fiduciary relationship becomes particularly complex when families are engaged in Medicaid planning strategies or preparing for long-term care costs. Agents must ensure their actions don’t inadvertently violate look-back rules or compromise eligibility for benefits.

Legal Remedies and Recovery Options

Monetary Recovery

The second important statutory provision is Fla. Stat. 709.2117, which provides that an agent, if found to have wrongfully taken money from a principal, is required to pay the value of the property that would have been had if the violation didn’t exist.

This restoration requirement ensures that victims can recover the full value of their losses, not just the amount initially taken. The calculation considers what the assets would have been worth without the improper interference.

Attorney’s Fees and Costs

Further, as identified in 709.2116(3), in addition to the actual return of the money, a successful litigant who establishes that a conflict of interest had actually occurred or more precisely that a breach of the fiduciary obligation occurred will also be entitled to the recovery of attorney’s fees and costs of litigation.

This fee-shifting provision makes it economically feasible for victims to pursue legitimate claims, even when the wrongdoing involves smaller amounts. It also serves as a significant deterrent to potential abusers.

Shifting the Burden of Proof

Another important concept in power of attorney litigation in Florida deals with a shifting of the burden of proof. Per Florida Statute 709.2116, if a transfer of assets is shown in a judicial proceeding to be a conflict of interest by virtue of a transfer to an affiliate or to the agent personally, the agent must then prove by clear and convincing evidence that:

• The transfer was solely in the interest of the principal, or
• The transfer was in good faith in the principal’s best interest, and the conflict of interest was expressly authorized

This is an important shift from the Plaintiff’s typical burden of proof. If a Plaintiff can show simply that the transaction was to an agent or an agent’s affiliate, meaning a spouse, sibling, descendant or corporation of the agent, then the agent must prove that it was valid or be subject to repaying the amount taken along with attorney’s fees and costs.

This burden-shifting provision can be particularly valuable in cases involving asset protection planning or other complex estate planning scenarios. When agents make transfers that could affect Medicaid eligibility or inheritance rights, they bear the burden of proving these actions were proper.

Taking Action Against Power of Attorney Abuse

Whatever your situation, know that abuse of the power of attorney is fraud. Sadly this is one of the most common forms of elder abuse and fraud we encounter in Florida. If you suspect that someone you know has been taken advantage of and the perpetrator used a power of attorney to make unauthorized transactions, give us a call and learn more about your rights under Florida Law.

The sooner you act, the better your chances of recovery. Evidence can disappear, and statutory deadlines may limit your ability to pursue claims if you wait too long.

Relevant Statutory Authority

709.2114. Deberes del agente

(1) Un mandatario es un fiduciario. No obstante lo dispuesto en el poder, un agente que ha aceptado el nombramiento:

(a) Debe actuar únicamente dentro del ámbito de autoridad otorgado en el poder. En el ejercicio de esa autoridad, el agente:

No puede actuar en contra de las expectativas razonables del mandante realmente conocidas por el agente;

Debe actuar de buena fe;

May not act in a manner that is contrary to the principal’s best interest, except as provided in paragraph (2)(d) and s. 709.2202; and

Debe intentar preservar el plan de sucesión del mandante, en la medida en que el agente lo conozca realmente, si preservar el plan es coherente con el mejor interés del mandante basándose en todos los factores relevantes, incluidos:

El valor y la naturaleza de los bienes del mandante;

Obligaciones previsibles del empresario y necesidad de mantenimiento;

Minimización de impuestos, incluidos los impuestos sobre la renta, el patrimonio, sucesiones, transferencias por salto generacional y donaciones;

Derecho a una prestación, un programa o una ayuda en virtud de una ley o una norma.

El historial personal del director de hacer o participar en donaciones;

(b) May not delegate authority to a third person except as authorized under s. 518.112 or this part or by executing a power of attorney on a form prescribed by a government or governmental subdivision, agency, or instrumentality for a governmental purpose;

(c) Debe llevar un registro de todos los ingresos, desembolsos y transacciones realizadas en nombre del mandante; y

(d) Debe crear y mantener un inventario preciso cada vez que el agente acceda a la caja de seguridad del mandante, si el poder autoriza al agente a acceder a la caja.

(2) Salvo que en el poder se disponga otra cosa, el mandatario que haya aceptado el nombramiento deberá:

(a) Actuar lealmente en beneficio exclusivo del mandante;

(b) Actuar de forma que no se cree un conflicto de intereses que menoscabe la capacidad del agente para actuar imparcialmente en el mejor interés del mandante;

(c) Actuar con el cuidado, la competencia y la diligencia que normalmente ejercen los agentes en circunstancias similares; y

(d) Cooperar con una persona que tenga autoridad para tomar decisiones de asistencia sanitaria en nombre del representado, con el fin de cumplir las expectativas razonables de éste en la medida en que el representante las conozca realmente y, por lo demás, actuar en el mejor interés del representado.

(3) Un agente que actúa de buena fe no es responsable ante ningún beneficiario del plan sucesorio del mandante por no haber preservado el plan.

(4) Si un agente es seleccionado por el representado debido a las habilidades especiales o experiencia que posee el agente o confiando en la declaración del agente de que posee habilidades especiales o experiencia, las habilidades especiales o experiencia deben ser consideradas para determinar si el agente ha actuado con cuidado, competencia y diligencia dadas las circunstancias.

(5) En ausencia de incumplimiento de las obligaciones para con el representado, el representante no es responsable si el valor de los bienes del representado disminuye.

(6) Except as otherwise provided in the power of attorney, an agent is not required to disclose receipts, disbursements, transactions conducted on behalf of the principal, or safe-deposit box inventories, unless ordered by a court or requested by the principal, a court-appointed guardian, another fiduciary acting for the principal, a governmental agency having authority to protect the welfare of the principal, or, upon the death of the principal, by the personal representative or successor in interest of the principal’s estate. If requested, the agent must comply with the request within 60 days or provide a writing or other record substantiating why additional time is needed and comply with the request within an additional 60 days.

709.2117. Responsabilidad del agente

Un agente que infrinja esta parte es responsable ante el mandante o los derechohabientes del mandante de la cantidad necesaria para:

(1) Restablecer el valor de la propiedad del mandante al que habría tenido de no haberse producido la infracción; y

(2) Reembolsar al mandante o a sus causahabientes los honorarios y gastos de abogado pagados con fondos del mandante en nombre del mandatario en defensa de las acciones de éste.

709.2116. Desagravio judicial; conflictos de intereses

(1) Un tribunal puede interpretar o hacer cumplir un poder, revisar la conducta del agente, poner fin a la autoridad del agente, destituir al agente, y conceder otras medidas apropiadas.

(2) Las siguientes personas pueden presentar una petición ante el tribunal:

(a) El mandante o el mandatario, incluido cualquier mandatario sucesor designado.

(b) Un tutor, curador, fideicomisario u otro fiduciario que actúe en nombre del mandante o de su patrimonio.

(c) Una persona autorizada para tomar decisiones de atención sanitaria en nombre del representado si la atención sanitaria de éste se ve afectada por las acciones del agente.

(d) Cualquier otra persona interesada si demuestra a satisfacción del tribunal que está interesada en el bienestar del representado y cree de buena fe que la intervención del tribunal es necesaria.

(e) Una agencia gubernamental con autoridad reguladora para proteger el bienestar del principal.

(f) Una persona a la que se le pide que cumpla el poder.

(3) En cualquier procedimiento iniciado mediante la presentación de una petición en virtud de esta sección, incluyendo, pero no limitado a, la negativa irrazonable de una tercera persona para permitir que un agente para actuar de conformidad con el poder de abogado, y en los desafíos para el correcto ejercicio de la autoridad por parte del agente, el tribunal otorgará honorarios razonables de abogados y costas como en las acciones de cancillería.

(4) Si el ejercicio de un poder por parte de un agente es impugnado en un procedimiento judicial iniciado por o en nombre del representado sobre la base de que el ejercicio del poder se vio afectado por un conflicto de intereses, y se presentan pruebas de que el agente o un afiliado del agente tenía un interés personal en el ejercicio del poder, el agente o afiliado tiene la carga de probar, mediante pruebas claras y convincentes, que el agente actuó:

(a) Únicamente en interés del obligado principal; o

(b) De buena fe, en el mejor interés del poderdante, y el conflicto de intereses estaba expresamente autorizado en el poder.

(5) A efectos del apartado (4):

(a) Una disposición que autoriza a un agente a participar en una transacción afectada por un conflicto de intereses que se inserta en un poder como resultado del abuso de una relación fiduciaria o confidencial con el principal por el agente o el afiliado del agente es inválida.

(b) Las filiales de un agente incluyen:

El cónyuge del agente;

Los descendientes, hermanos, padres o cónyuges del agente;

Una sociedad u otra entidad en la que el agente, o una persona que posea un interés significativo en el agente, tenga un interés que pueda afectar al buen juicio del agente;

Una persona o entidad que posea una participación significativa en el agente; o

El agente que actúa en calidad de fiduciario para alguien distinto del mandante.

Descargo de responsabilidad: La información contenida en este blog/sitio web tiene únicamente fines informativos y proporciona información general sobre la ley, pero no asesoramiento específico. Esta información no debe utilizarse como sustituto del asesoramiento de un abogado competente, ya que las leyes cambian y es necesario analizar los hechos de su caso concreto.