A power of attorney can be one of the most important legal tools in an estate plan. It allows a trusted individual to manage financial or legal affairs on behalf of another person during periods of illness, incapacity, or advanced age. When used properly, a power of attorney can help ensure continuity, avoid unnecessary court intervention, and protect a person’s interests during vulnerable periods of life.

Unfortunately, powers of attorney can also become the source of significant disputes. Because these documents often grant broad authority over finances, property, and legal affairs, they can create opportunities for abuse, self-dealing, or financial exploitation. In many cases, family members do not discover potential problems until substantial assets have already been transferred or depleted.

At the Aldrich Law Firm, PLLC, we represent clients in San Antonio and throughout Texas in disputes involving powers of attorney and related fiduciary misconduct. These matters often involve allegations of financial exploitation, unauthorized transfers, breach of fiduciary duty, or disputes regarding the validity or scope of authority granted under the document. Whether you are seeking to challenge suspicious conduct or defend against allegations of wrongdoing, it is important to understand your rights and act promptly.

What Is a Power of Attorney?

A power of attorney is a legal document that authorizes one person, known as the “agent” or “attorney-in-fact,” to act on behalf of another person, known as the “principal.” Depending on the terms of the document, the agent may have authority to manage banking matters, real estate transactions, investments, business affairs, contracts, and other financial or legal matters.

Many powers of attorney are “durable,” meaning they remain effective even if the principal later becomes incapacitated. Because these documents can grant extensive control over a person’s finances and property, Texas law imposes important fiduciary duties on agents acting under a power of attorney.

Disputes frequently arise when family members, heirs, or beneficiaries believe an agent abused their authority, acted contrary to the principal’s wishes, or improperly benefited from their position.

Fiduciary Duties of an Agent

Under Texas law, an agent acting under a power of attorney owes fiduciary duties to the principal. These duties generally include obligations of loyalty, honesty, good faith, and fair dealing.

An agent is required to:

• Act in the principal’s best interests – An agent must make decisions based on what benefits the principal rather than what benefits the agent personally. This duty requires the agent to place the principal’s interests above their own in managing financial and legal affairs.
• Avoid self-dealing or conflicts of interest – Transactions that personally benefit the agent may be improper, particularly when they diminish the principal’s assets or alter the intended distribution of property. Courts often closely examine transfers involving family members or substantial gifts to the agent.
• Maintain accurate financial records – Agents should keep detailed records of transactions made on behalf of the principal, including bank activity, expenditures, and transfers of property. Poor recordkeeping or missing documentation can create significant legal issues and raise concerns about misconduct.
• Preserve the principal’s estate plan when appropriate – An agent generally should not take actions that undermine the principal’s known estate planning objectives without proper authority. Significant changes to ownership, beneficiary designations, or gifting patterns may become the subject of later disputes.
• Keep the principal’s property separate from their own – Commingling funds or property can create confusion and increase the risk of misuse. Maintaining separate accounts and records is often essential to demonstrating that the agent acted properly.

When an agent violates these obligations, they may be held legally responsible for resulting damages.

Common Types of Power of Attorney Disputes

Power of attorney litigation can arise in many different circumstances. Some of the most common disputes involve allegations that an agent improperly handled assets, exceeded the scope of their authority, or took advantage of a vulnerable individual.

Unauthorized Transfers of Assets

One of the most common sources of litigation involves transfers of money or property that appear inconsistent with the principal’s prior wishes or financial history. An agent may transfer funds to themselves, change ownership of property, or move assets into joint accounts without proper authority.

These disputes often arise after family members discover significant financial changes shortly before the principal’s death or incapacity. Litigation may focus on whether the transactions were authorized, whether the principal understood them, and whether the transfers improperly altered the principal’s estate plan.

Self-Dealing and Conflicts of Interest

As noted previously, an agent acting under a power of attorney owes fiduciary duties to the principal and generally must act in the principal’s best interests rather than their own.

Self-dealing may occur when an agent uses their authority to personally benefit from transactions involving the principal’s assets. Examples can include transferring property to themselves, making large gifts, using the principal’s funds for personal expenses, or entering transactions that create conflicts between the agent’s interests and those of the principal.

Because these transactions often occur within families and behind closed doors, they frequently become the subject of probate and estate litigation after the principal passes away.

Financial Exploitation of Vulnerable Individuals

Elderly individuals and those experiencing cognitive decline are particularly vulnerable to financial exploitation. In some cases, an agent may isolate the principal from family members, gain increasing control over financial affairs, and gradually redirect assets for personal benefit.

These cases can involve allegations of undue influence, manipulation, coercion, or abuse of a confidential relationship. They often require extensive review of medical records, financial transactions, communications, and witness testimony to determine whether the principal’s wishes were improperly overridden.

Disputes Regarding the Validity of the Power of Attorney

Not every dispute centers on how an agent used their authority. In some cases, the dispute involves whether the power of attorney itself is legally valid.

Challenges may involve allegations that:

• The principal lacked the required mental capacity when executing the document
• The document was procured through undue influence or fraud
• The power of attorney was improperly executed
• The document was forged or altered

If a power of attorney is found invalid, transactions performed under its authority may also be challenged.

Actions Exceeding the Scope of Authority

An agent’s authority is limited by both the language of the power of attorney and applicable Texas law. Even where the document itself is valid, disputes may arise when an agent takes actions beyond what the document authorizes.

For example, certain gifting authority or rights to change beneficiary designations may need to be expressly granted. Transactions outside the scope of authority may be voidable and subject to litigation.

Failure to Maintain Records or Provide Information

Agents acting under a power of attorney are often expected to maintain accurate records of financial activity conducted on behalf of the principal. A lack of documentation, inconsistent records, or refusal to provide information can create serious concerns regarding how assets were handled.

In many cases, litigation begins when family members or fiduciaries request information about transactions and receive incomplete or conflicting explanations.

Signs of Potential Power of Attorney Abuse

In many cases, family members first become aware of problems after noticing unusual financial activity or sudden changes in the principal’s affairs.

Warning signs can include:

• Large or unexplained transfers of money – Sudden withdrawals, transfers to unfamiliar accounts, or significant gifts made shortly before death may indicate misuse of authority or financial exploitation.
• Sudden changes to ownership of property – Changes to deeds, account ownership, or beneficiary designations can substantially alter the principal’s estate plan and may warrant closer examination.
• Isolation of the principal from family members – An agent who limits communication or access to the principal may be attempting to avoid scrutiny or exert undue influence over financial decisions.
• Missing financial records or lack of transparency – Refusal to provide accountings, missing documentation, or inconsistent explanations regarding financial activity can be warning signs of misconduct.
• Significant changes to estate planning documents – Unexpected revisions to wills, trusts, or beneficiary designations—particularly during periods of declining health or incapacity—may raise concerns about undue influence or lack of capacity.
• Unusual gifts or transactions benefiting the agent – Transfers that disproportionately benefit the agent, especially when inconsistent with prior conduct or estate plans, often become a central focus of litigation.

These situations often require detailed investigation, including review of bank records, property records, medical information, communications, and witness testimony.

Litigation Involving Powers of Attorney

Power of attorney disputes can involve a wide range of legal claims depending on the circumstances of the case. Potential claims may include:

• Breach of fiduciary duty  – These claims allege that the agent failed to act in the principal’s best interests or violated duties imposed by law. Remedies may include damages, repayment of funds, or equitable relief.
• Fraud or fraudulent transfer – Litigation may arise where assets were transferred through deception, concealment, or improper manipulation of the principal.
• Conversion or theft of assets – An agent who improperly takes or controls property belonging to the principal may face claims seeking recovery of those assets and related damages.
• Demands for accountings – Courts may require agents to provide detailed financial records and explanations regarding how assets were managed and distributed.
• Declaratory judgment actions regarding the validity or scope of authority – These proceedings may ask the court to determine whether a power of attorney is valid or whether particular actions fell within the agent’s authority.
• Recovery of improperly transferred property – Litigation may seek to unwind transfers, recover funds, or impose equitable remedies designed to return assets to the estate or rightful owner.

Depending on the circumstances, courts may order repayment of funds, rescission of transactions, injunctive relief, attorney’s fees, or other remedies designed to protect the principal or estate.

Power of Attorney Disputes After Death

Many power of attorney disputes are not discovered until after the principal has passed away. During probate proceedings, heirs, beneficiaries, or executors may uncover suspicious transfers or financial activity that occurred shortly before death.

These disputes frequently overlap with probate and estate litigation, particularly when alleged misconduct affects the value of the estate or alters the expected distribution of assets. In some cases, litigation may involve both probate claims and separate causes of action related to the misuse of a power of attorney.

Because records can become more difficult to obtain over time, early investigation is often critical in preserving evidence and evaluating potential claims.

Our Approach to Power of Attorney Litigation

Power of attorney disputes are often emotionally charged and fact-intensive. These cases frequently involve family conflict, complicated financial records, and allegations of misconduct occurring over extended periods of time.

Our law firm approaches these matters with a focus on careful investigation, strategic analysis, and practical solutions.

Our representation often includes:

• Early factual investigation – Prompt investigation can be critical to preserving records, tracing transactions, and identifying potential misconduct before evidence becomes more difficult to obtain.
• Detailed review of financial activity – We analyze bank statements, deeds, transfers, beneficiary changes, and other financial records to identify suspicious transactions and evaluate potential claims or defenses.
• Evaluation of fiduciary duties and authority  – We assess the scope of authority granted under the power of attorney and whether the agent’s actions complied with Texas law and fiduciary obligations.
• Strategic development of claims and defenses  – Every case presents different legal and factual issues. We work to develop a strategy tailored to the client’s goals and the specific circumstances involved.
• Protection and recovery of assets  – In many cases, the misuse of a power of attorney directly affects the value of an estate or trust. We work to preserve, recover, and protect assets where appropriate.
• Negotiation, mediation, and litigation when necessary  –  Some disputes can be resolved outside of court, while others require aggressive litigation. We prepare each case thoroughly and advocate for practical, effective resolutions.

Our goal is not only to address misconduct where it exists, but also to help clients navigate difficult family and financial disputes with clarity and strategic guidance.

Frequently Asked Questions

Can a power of attorney be challenged in Texas?

Yes. A power of attorney may be challenged on several grounds, including lack of capacity, undue influence, fraud, forgery, or improper execution. It may also be challenged if the agent exceeded their authority or breached fiduciary duties owed to the principal.

Can an agent under a power of attorney give gifts to themselves?

Not necessarily. Under Texas law, an agent’s authority to make gifts is limited and often depends on the language of the power of attorney itself. Transactions that benefit the agent personally are frequently scrutinized and may become the subject of litigation.

What remedies are available in a power of attorney dispute?

Depending on the circumstances, remedies may include recovery of improperly transferred assets, monetary damages, injunctive relief, accountings, rescission of transactions, attorney’s fees, or equitable remedies such as constructive trusts.

What if suspicious transfers occurred before death?

Transfers made before death may still be challenged after the principal passes away. Executors, heirs, and beneficiaries may have standing to investigate and pursue claims involving misuse of a power of attorney if the conduct harmed the estate or affected inheritance rights.

How are power of attorney disputes proven?

These cases often depend on financial records, witness testimony, medical evidence, and the surrounding circumstances of the transactions involved. Bank records, communications, estate planning documents, and testimony from family members, caregivers, or medical providers may all become important evidence in determining whether misconduct occurred.

Speak With a San Antonio Power of Attorney Litigation Attorney

Power of attorney disputes can involve substantial financial consequences and complex legal issues. Whether you are seeking to investigate suspicious conduct, recover assets, defend against allegations, or protect the interests of a loved one, early legal guidance can make a significant difference.

To schedule a consultation with a San Antonio power of attorney litigation attorney, contact our law firm at (210) 399-3964 or complete the intake form on our website.