What if My Agent Breaches His or Her Duty to Me?

What if My Agent Breaches His or Her Duty to Me?

Your agent has special legal duties.  These are called fiduciary duties.  A fiduciary duty is the highest duty known in the law.  Your agent owes these fiduciary duties to you.  Your agent also owes these same duties to your guardian and conservator.  Those duties are described in detail in a prior post to this blog entitled “What Are My Agent’s Obligations?”

If your agent violates his or her fiduciary duty to you, your first step is to terminate your agent’s authority under your power of attorney.  This is usually done by informing your agent in writing that his or her authority is terminated.  Terminating your agent’s authority is discussed in more detail in a prior post to this blog entitled “When Does My Agent’s Authority Stop?”

Your second step is to inform any person or business dealing with your agent that you have terminated your agent’s authority.  

Your third step is to consult a lawyer about claims you may have against your agent and your obligations to persons or businesses your agent dealt with.

You are still bound by your agent’s actions even if (s)he violated his or her fiduciary duty to you.  For example, if your agent breaches his or her fiduciary duty by signing a contract with a business, you are still bound by that contract.  You have a claim against your agent, but your agent’s breach of duty is not a defense against someone who dealt with your agent in good faith.  A person is not dealing with your agent in good faith if (s)he knew that your power of attorney was revoked, that your agent did not have authority to enter into the contract, or that entering into the contract was a breach of your agent's fiduciary duty to you.

If your agent knows, but does not tell you, that your co-agent has, or is about to, breach the co-agent’s fiduciary duty to you, then your agent is liable to you for all losses that could have been avoided if you had been informed.  A successor agent is not liable for a former agent’s breach of duty unless the successor agent conceals or participates in the former agent’s breach.

Your agent is not liable to you solely because the value of your property or estate declines unless it is the result of a breach of your agent’s duties to you.  Your agent is also not liable for breaching his or her duties to you if power of attorney specifically provides that (s)he is not liable for such a breach, unless:

·         The provision is the result of your agent abusing his or her confidential or fiduciary relationship with you; or

·         Your agent acted dishonestly, with an improper motive, or with reckless indifference to your best interest or the purpose of your power of attorney.

If your agent breaches his duty to you, (s)he is liable to you for the amount necessary to restore the value of your property or estate to the level it would have been had there no breach, plus your attorney's fees and costs.

Any interested person can ask a judge to review your agent’s actions.  An interested person includes:

• You,

• A person asked to accept your power of attorney,

• Your spouse, parent, child, guardian, conservator, caregiver, fiduciary, descendent or presumptive heir,

• Your agent,

            • A person authorized to make health care decisions for you,

• Someone who demonstrates sufficient interest in your welfare,

            • A beneficiary of your estate or trust; and

            • A government agency with authority to protect your welfare.

However, if you object, the judge cannot review your agent's actions unless your agent is asking for the review or the judge finds that your lack the capacity to revoke your power of attorney or your agent's authority.  You probably lack the capacity to revoke your power of attorney or your agent's authority if you are impaired in your ability to manage your property or business affairs or to make or communicate decisions even with the use of technological assistance.  The lack of capacity and its consequences are discussed in more detail in a prior post to this blog entitled “What If I Become Incompetent or Incapacitated?”

If the judge finds your agent breached his or her fiduciary duty to you, your agent can be held liable for the cost of repairing the breach and paying the interested person’s attorney’s fees and costs.

Thomas T. Tornow has 33 years of experience helping people whose agents have breached their duties and assisting agents accused of breaching their duties.  Contact his office at www.tornowlaw.com to schedule your free consultation.

Thomas T. Tornow, P.C.

By: Thomas T. Tornow

This post is exclusively for informational purposes. It is not legal advice. Viewing this post, using information from it, or communicating through this blog does not create an attorney-client relationship. Thomas T. Tornow, P.C. is not liable for the use or interpretation of information on this blog and expressly disclaims all liability for any actions you may or may not take based on the content of this blog.