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2440 Remedying Fiduciary Exploitation

APS IH September 2014

A common form of financial exploitation is misconduct on the part of a fiduciary. A fiduciary is a person who formally agrees to manage another person’s money or property on his or her behalf. Common kinds of fiduciaries are:

  •   representative payee;

  •   power of attorney (POA); and

  •   trustee.

Usually, a representative payee or guardian who takes funds of a beneficiary or ward for the representative payee’s or guardian’s own use is abusing the fiduciary relationship and committing financial exploitation. However, the attorney representing DFPS determines what powers the trustee or agent has, according to the legal instrument creating the fiduciary relationship and the legal duties set forth in law. Only then is it possible to say whether a specific transfer was exploitative.

2441 Procedures for Determining Fiduciary Exploitation

APS IH September 2014

In order to determine whether an alleged victim is being exploited by a fiduciary, the APS specialist:

  •   discusses the language of trust documents or powers of attorney (POAs) with the regional attorney; and

  •   determines, with the regional attorney, if the transfer of assets to the beneficiaries or principals was appropriate under the guidelines set forth in the legal instrument.

2442 Procedures for Remedying Fiduciary Exploitation

APS IH September 2014

If it is determined that financial exploitation by a fiduciary has occurred, the APS specialist discusses available remedies with the alleged victim. The remedies listed in this section are provided for information purposes only. To pursue this legal option, the alleged victim must hire a private attorney. APS cannot provide legal representation or assistance in such a matter.

If there is misconduct on the part of a …

then remedies may include …

representative payee for SSA, VA, or other federal benefits, …

  •   changing representative payee;

  •   notifying the agency that issues the payments. Its fraud and abuse division can investigate.

agent or attorney-in-fact (one who acts for another under a POA), …

  •   revoking the POA. POAs can be revoked at any time and in any manner. Alleged victim may seek a private attorney;

  •   hiring a private attorney, through whom the alleged victim may demand an accounting from the agent or attorney-in-fact.

      State law identifies POA agents as fiduciaries and requires them to keep detailed records of all transactions they make with the principal’s (alleged victim’s) assets. They must also render an accounting to the principal within 60 days of it being demanded.

      If the agent fails to furnish the accounting, the principal may go to court to have it ordered. To pursue this legal option, the principal, or the principal’s guardian, must hire a private attorney. APS cannot provide legal representation or assistance in such a matter.

trustee, …

going to court. Trusts are not overseen by any outside authority. A civil suit or criminal prosecution may be necessary to address trustee malfeasance.

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