In the world of business, wealth, and personal legacy, trusted relationships are everything. But what happens when trust is abused, particularly when someone misuses a Power of Attorney (POA) to take advantage of another’s finances, assets, or well-being?
What Is a Power of Attorney?
A POA is a legal document that gives one person (the agent) the authority to act on behalf of another (the principal) in legal and financial matters. For busy professionals or aging individuals, it’s a powerful planning tool, but it can also become a vehicle for abuse.
Because a POA can grant sweeping authority over property, finances, and legal decisions, it can be misused in ways that are difficult to detect until substantial damage has been done.
Signs of POA Abuse
POA abuse can take many forms:
- Unauthorized use of funds or business assets
- Self-dealing or improper gifts
- Failure to pay bills or manage investments responsibly
- Exclusion of family or business partners from key decisions
- Undue influence over a vulnerable person, often during periods of illness, aging, or incapacity
These abuses frequently surface in the context of trust and estate disputes, family conflict, or corporate transitions.
What Are the Legal Remedies?
New York law provides powerful tools to detect, stop, and correct POA abuse, particularly under two legal frameworks: Mental Hygiene Law (MHL) Article 81 and the General Obligations Law (GOL).
1. Guardianship Proceedings (MHL Article 81)
If someone is incapacitated or being exploited, a concerned party can seek the appointment of a legal guardian. The court can:
- Remove the agent under a POA
- Revoke the POA and health care proxy
- Appoint a trusted individual or neutral party to oversee the person’s needs and property
- Order the former agent to account for all transactions and, if necessary, return misappropriated funds
In these proceedings, the court prioritizes the least-restrictive alternative and the best interests of the individual involved. Even if a POA exists, if it's not being used appropriately, the court may intervene.
2. Accountings and Special Proceedings (GOL §§ 5-1505 & 5-1510)
New York’s GOL allows certain parties to demand transparency and challenge misconduct.
Agents must produce a record of all financial transactions within 15 days of a written request.
Interested parties, such as a spouse, child, or successor in interest, may petition the court to:
- Remove the agent
- Compel production of financial records
- Assess and potentially revoke agent compensation
- Determine the validity of the POA itself
This provides a meaningful alternative to full-blown guardianship, particularly for financially sophisticated families and individuals seeking a direct and efficient resolution.
Why It Matters for High-Asset Individuals
When POAs are abused, the stakes are high: real estate, business equity, retirement accounts, and complex portfolios may be at risk. If you or someone you care about has granted a POA—or suspects misuse of one—swift, strategic legal action can make the difference between protecting a legacy and watching it unravel.
At The Glennon Law Firm, we have deep experience navigating these sensitive matters and litigating disputes involving financial abuse, guardianship, and fiduciary misconduct. Whether your case involves a business partner, family member, or third-party agent, we’re here to provide clear strategy, immediate action, and relentless advocacy.
Think You May Have a Case?
Contact us today to schedule a confidential consultation. We’ll help you understand your options and protect what matters most.
To learn more about topics regarding trust and estate litigation, you may want to review the information provided on our website pages: Executor Rights and Responsibilities, Spousal Election, Undue Influence, Importance of Having a Properly Executed Will, Was Your Loved One Manipulated?
You may learn more about us and how we operate by visiting these pages: About Us and What Sets Us Apart.
This post is for informational purposes only and does not constitute legal advice. If you suspect abuse of a power of attorney, speak with an attorney experienced in fiduciary and asset protection litigation.