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Here's a summary of Burton v. Williams, a recent North Carolina Court of Appeals case (adapted from today's NAELA eBulletin):

Plaintiff sued defendant as attorney-in-fact for decedent, alleging that an addendum and payment agreement release entered into between decedent and defendant regarding the sale of decedent’s property were void and unenforceable.  The grounds were that (1) At the time the documents were signed, decedent lacked the mental capacity to assent to the addendum and release; (2) the agreements were obtained through undue influence and duress; (3) they were procured through fraud; and (4) they were not supported by consideration.  After presenting his evidence, plaintiff moved for a directed verdict, and the court granted on grounds that the release was void and unenforceable for lack of consideration.  Defendant claimed this violated his right to trial by jury. However, because plaintiff established his claim through documentary evidence, which both parties stipulated was authentic and correct, the Court of Appeals ruled that the trial court properly directed the verdict in favor of plaintiff despite plaintiff having the burden of proof at trial. No consideration for the payment agreement was specified, and the document which was the basis of the agreement, as a matter of law, was not a valid contact. 

Burton v. Williams, 2010 N.C. App. LEXIS 93 (January 19, 2010)

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In a recent Florida case, Bank of America was held liable for refusing to honor a power of attorney:

Copyright 2009 Stuart News Company All Rights Reserved The Stuart News/Port

St. Lucie News (Stuart, Florida) November 15, 2009 Sunday Martin County

Edition SECTION: LOCAL; Pg. B5 LENGTH: 496 words HEADLINE: Stuart man

takeson Bank of America BYLINE: Melissa E. Holsman staff writer BODY:

STUART

-- When Clarence H. Smith Jr. sued Bank of America in 2007 over its

refusal to honor the power of attorney his now-deceased father had enacted years

before, he called it as a case of David against Goliath. And like

David, Smith on Friday walked out of court a winner, armed with a jury award

worth $64,142. "I'm glad we won, but I think it's a victory for more than

just us," said Smith, 67, of Stuart. "It's a victory for anyone who gets a

rough deal from a big bank -- that a little person can prevail against a huge

international bank." After a week-long trial, it took a one-man,

five-women jury 15 minutes to determine Bank of America had not acted

reasonable in September 2007 when it denied Smith Jr.'s request to

transfer $65,000 his father, Clarence H. Smith Sr, then held in a joint account

with a female friend he knew from living at Ocean Palms Retirement Center.

Smith said his ordeal with the bank began when he became suspicious

money may be missing from his father's bank accounts. He presented to

former Stuart branch manager Victoria Carscadden the durable power of attorney

he'd had on behalf of his father with a request to transfer money from the

elder Smith's jointly held accounts into a new account only the father and son

could access. But instead of honoring the request, Carscadden

testified that she consulted bank policies and called the woman on the account

with Clarence Smith Sr., and she accused the son of trying to steal his

father's money. Carscadden said she refused Smith's request because bank

rules governing jointly held accounts require that all signatures on an

account must agree to any transfers or changes. The woman sharing Clarence

Smith Sr.'s account, she said, had refused to allow any money to be moved.

At trial, Smith's Stuart attorney William R. Ponsoldt Jr. showed that

despite Carscadden visiting Clarence Smith Sr. to see he was competent and that

he wanted his son to manage his affairs, she still refused to recognize

Clarence Smith Jr.'s power of attorney. Shortly afterward, Ponsoldt told

jurors, the woman sharing Clarence Smith Sr.'s account moved all the

money into an account only she could access. Clarence Smith Sr. died about

three weeks later, Ponsoldt said. He argued that the bank's refusal to =

honor Smith's power of attorney went against state law. During his closing

argument, Bank of America attorney J. Randolph Liebler of Miami, said

based on bank policies, "it would be absolutely inappropriate to have honored

the power of attorney where there was some allegation of abuse -- rightly or

wrongly." After court, Bank of America spokeswoman Shirley Norton

said they were disappointed in the jury's verdict. "We believe that

neither the facts nor the law support the verdict," she said, "and we plan to

appeal." Smith meanwhile, said he'll use the money to pay bills from

his father's estate. "I feel fortunate we were able to take on Bank of

America," he said. "Think of all the people who can't."

Thanks to Brevard attorney Nicola Melby for bringing this to my attention.  North Carolina also has laws to help with enforcement of a valid power of attorney.  N.C.GS. Section 32A-40 et sq.

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Many people come to see me for asset protection advice only after some type of actual or probable liability has arisen.  At that time, it is normally too late to do any meaningful asset protection, as most contemplated transfers of property could be undone as a fraudulent conveyance.

In order to determine whether there has been a fraudulent conveyance, which would render the planning useless, the courts look at "badges of fraud, such as the following:

1. An inadequate or fictitious consideration or a false recital as to consideration.
2. The fact that property is transferred by a debtor in anticipation of or during a pending suit.
3. Transactions which are not in the usual course or method of doing business.
4. The giving of an absolute conveyance which is intended only as security.
5. The failure to record the conveyance or an unusual delay in recording the payment.
6. Secrecy and haste are ordinarily regarded as badges of fraud but are not in themselves conclusive of fraud.
7. Insolvency or substantial indebtedness of the grantor.
8. The transfer of all the debtor's property, especially when she is insolvent or greatly financially impoverished.
9. An excessive effort to clothe a transition with the appearance of fairness.
10. The failure of parties charged with fraudulent conveyance to produce available evidence or to testify with sufficient preciseness as to the pertinent details, at least in cases where the circumstances under which the fraud, transfer took place are suspicious.
11. The unexplained retention of possession of property transferred by the grantor after conveyance.
12. The buyer's employment of the seller to manage the business as before, selling the goods which were the subject of the transfer.
13. The failure to examine or to take an inventory of the goods bought or the presence of looseness or incorrectness in determining the value of property.
14. The reservations of a trust for the benefit of the grantor and the property conveyed.
15. The existence of a blood or other close relationship between the parties to the transfer.

Also, certain other circumstances may constitute evidence of fraud, such as the transferee's failure to keep a record of the dates and amounts of loans, or advances made by him to the transferor; failure to demand repayment; an erroneous or insufficient description of the property transferred; sending the money received from the transferee out of the country; assignment of the property to the seller rather than to the purchaser; and the fact that the purchaser, soon after transfer, offered to resell the property at a much higher price.

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North Carolina's elderly are particularly vulnerable to financial fraud and scams.  Check out the the North Carolina Department of Justice's website, which has helpful information for people of all ages to help protect themselves from identity theft, scams, and other crimes.  If you have an elderly family member without access to a computer,  please print the information and discuss it with them.

Even attorneys are being scammed these days, so it pays to be vigilant!

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