How Do I Prevent a Relative From Abusing a Power of Attorney?

Full question:

My sister in law has cancer and wont be around much longer, she has 2 kids from a previous marriage and is married to my brother who had a major brain injury 4 years ago and is disabled. We suspect she has signed over power of attorney for my brother to her son (brothers step son) We suspect she had him sign a document which allowed this but no one in our family was made aware. We have been told there is a $100,000 dollar life insurance policy which would go to my brothers step son, and he would manage my brothers finances. Our fear is we wont have any say in my brothers care and my brother isn't able to take care of himself. What options do we have? Also we live in MN and they are thinking about moving to IA which where the step son lives.

• Category: Power of Attorney
• Date: 04/07/2025
• State: Minnesota

Answer:

The answer will depend in part on whether the brother has the mental capacity required to create a power of attorney. If he does, then it may be necessary to petition the court for guardianship or bring a claim for breach of fiduciary duty to overrirde the power of attorney. A power of attorney is a legal instrument that individuals create and sign that gives someone else the authority to make certain decisions and act for the signer. The person who has these powers is called an "agent" or "attorney-in-fact." The signer is the "principal." The principal must have mental capacity to make the power of attorney at the time of signing. A person who is unconscious cannot make a valid power of attorney. As a principal, if the principal's decisions conflict with those of the agent, the principal's decision will govern, assuming that the agent confers with the principal prior to taking an action. If an agent has acted on the principal's behalf and acted within the scope of authority granted by the power of attorney, then the principal may be obligated by the terms and conditions of his actions.

The person designated to be the agent assumes certain responsibilities.

The agent is obligated to act in the principal's best interest. The agent must always follow the principal's directions. Agents are "fiduciaries," which means that the agent must act with the highest degree of good faith in behalf of their principals. The agent must keep his money separate from the principal's; keep detailed records concerning all transactions he engages in on the principal's behalf; not stand to profit by any transaction where the agent represents the principal's interests; and not make a gift or otherwise transfer any of the principal's money, personal property, or real estate to himself unless the power of attorney explicitly states he can do so. An agent who acts against the principal's interest for his own gain, or acts outside the authority granted in the power of attorney, may be held personally liable.

In some cases where a person becomes incapacitated without having a power of attorney, it may be necesary to establish a guardianship to manage the person's welfare and financial affairs. Guardianships may be either over a person, their estate, or both. A guardian manages the daily financial matters of the estate and/or provides care for the person.

A power of attorney for healthcare thus gives authority to one person to act on behalf of another. Any family members or individuals who were not given such authority would not have the same ability to make decisions on behalf of the principal.