Power of attorney is a valuable tool, which the principal can revoke at any time, but what happens when a third party wishes to challenge it? Here, experienced attorney Douglas Lauenstein explains the process for challenging the authority of power of attorney.
What is Power of Attorney?
Power of attorney is a legally binding document which gives an “agent” (often an attorney, trusted friend, or family member) the authority to make decision’s regarding the assets of the “principal” (the person to whom the assets belong). In Maryland, a power of attorney is either general or limited: general meaning the ability to act in all business and personal matters, and limited meaning the ability to act only in the scope the power of attorney defines. It is also important to note that in Maryland, any written document which grants authority to a person to act for another will be legally binding as a power of attorney, even if it does not explicitly say “power of attorney.”
Power of attorney assumes that the agent will work in the best interest of the principal, but this is not always the case. While the principal can revoke power of attorney at any time, a third party may wish to challenge power of attorney when the principal is unable to themselves, due to mental degeneration or other health concerns.
How Does a Third Party Challenge Power of Attorney?
A third-party challenge of power of attorney is not as simple as signing and notarizing a revocation form. Usually, it will require a formal contest in court, unless the agent voluntarily resigns their power of attorney.
The concept of a “durable” power of attorney is important when determining whether power of attorney can be challenged. In Maryland, unless a power of attorney states otherwise, it is considered “durable,” meaning it continues to be legally binding even after the principal becomes disabled. A power of attorney that is not durable will end as soon as the agent is made aware of the principal’s disability. If an agent continues to make decisions of behalf of the principal after a non-durable power of attorney ends, a third party would be able to contest any decisions made in court.
What is Abuse of Authority, and How Can It Be Fought?
An agent may abuse their authority in many ways: by stealing, mismanaging or misappropriating assets, or by neglecting the best interest and needs of the principal, to name a few. If a third party believes this is the case, they may challenge the power of attorney in court. The third party will need to file a legal action alleging abuse of the agent’s power. The third party will be required to explain their relationship to the principal, as well as their interest in the case and rationale for claims of abuse. A discovery motion will allow the third party to access records and documentation from the agent to substantiate the claims of abuse.
A third party may also file a petition with a court to become guardian of the principal. If guardianship is granted, the guardian may only make decisions for the principal that are approved by the court.
How Can Douglas Lauenstein Help?
For the average concerned friend or family member, challenging power of attorney may seem like an overwhelming process. This is why acquiring experienced legal representation is so critical: let Douglas Lauenstein help you and your loved ones get the justice you deserve. For more information, we urge you to contact us today.