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A power of attorney is employed to assign legal power to some other person. The main (anyone granting the ability of attorney) provides the agent, also known as the attorney-in-fact, the power to create legal choices on his/her behalf, including handling bank accounts, real estate, and other assets.

The potential for fraud exists in every power of attorney design, through home dealing, embezzlement, and illegitimate gifting. In certain situations, an estate will be significantly depleted by a power of attorney holder, making the heirs of the principal with little if any inheritance. Different ways where a power of attorney may be abused contain changing beneficiary designations on life insurance or annuities, and opening bank accounts with combined title or pay on death procedures in support of the agent.

The creation of a power of attorney may be pushed under the grounds of insufficient capacity or that proper formalities weren't followed by the creation. Reasons may exist to sue the agent for the return of embezzled house or for monetary damages, If your validly given power of attorney has been abused by the agent. If the principal remains living at the time of the motion, the agent can be sued by the principal immediately. In many situations, the energy of attorney abuse is part of a wider pattern of elder abuse. If the principal has passed away by enough time the energy of attorney punishment has been found, the principal's estate or the intended recipients of the property could be able to sue the agent for breach of fiduciary duty, tortious interference with estate planning, or lots of other causes of action.

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Because of the potential for abuse with a power of attorney, their use must be limited. The instrument will be left by many persons creating a power of attorney with the drafting attorney until the circumstances triggering the activation of the power have been induced, such as for instance the inability of the primary.