Can a power of attorney be challenged or invalidated if the person may not have had capacity when they signed it? – South Carolina

Short Answer

Yes. In South Carolina, a power of attorney can be challenged if the principal lacked capacity when signing, if the document was not executed with the required formalities, or if fraud, duress, or undue influence affected the signing. Even when the document appears valid on its face, the court can review the agent’s conduct and grant relief if an agent is misusing authority or acting outside the principal’s best interest.

Understanding the Problem

In South Carolina guardianship matters, the decision point is whether a signed power of attorney remains valid when the principal may not have had the mental ability to understand the document at the time of signing. The issue also includes whether a co-agent’s later handling of the principal’s money shows misuse of authority that justifies court review. The focus is on the principal’s capacity when the document was executed and the agent’s duty after accepting the role.

Apply the Law

South Carolina follows the South Carolina Uniform Power of Attorney Act for financial powers of attorney. A valid power of attorney must be signed by the principal, witnessed with the same formalities required for a will, and acknowledged or proved as required by state law. If the document is challenged, the court will usually look at whether the principal understood the nature of the document when signing, whether the signing process met statutory formalities, and whether the agent acted in good faith, within the granted authority, and in accordance with the principal’s expectations or, if unknown, in the principal’s best interest. In a dispute over misuse, the court is the main forum for reviewing the agent’s conduct and ordering relief.

Key Requirements

Capacity at signing: The principal must have had enough mental ability to understand that a power of attorney was being signed and what authority it gave to the agent.
Proper execution: A South Carolina financial power of attorney must be signed, properly witnessed, and acknowledged or proved. Problems with witnesses or acknowledgment can support an invalidity challenge.
Agent compliance with duties: After accepting the role, an agent must act in good faith, stay within the document’s limits, keep records, avoid harmful conflicts, and act in accordance with the principal’s expectations if actually known and otherwise in the principal’s best interest.

What the Statutes Say

S.C. Code Ann. § 62-8-105 (Execution of power of attorney) – sets the signing, witness, and acknowledgment requirements for a valid financial power of attorney.
S.C. Code Ann. § 62-8-114 (Agent’s duties) – requires an agent to act in good faith, within authority, and in accordance with the principal’s expectations if actually known and otherwise in the principal’s best interest, and to keep records of receipts, disbursements, and transactions.
S.C. Code Ann. § 62-8-116 (Judicial relief) – allows certain interested persons to ask the court to construe the power of attorney, determine its validity, review the agent’s conduct, and grant appropriate relief.
S.C. Code Ann. § 62-8-119 (Acceptance of and reliance upon acknowledged power of attorney) – explains when banks and others may rely on an acknowledged power of attorney unless they have actual knowledge that it is invalid or being misused.
S.C. Code Ann. § 62-8-201 (Authority that requires specific grant) – says certain acts, including making gifts, require express authority in the document.

Analysis

Apply the Rule to the Facts: The facts raise two separate but related issues. First, if the child lacked capacity when the power of attorney was signed, the document itself may be open to challenge. Second, even if the document was validly signed, a co-agent who has been transferring money to themself or withdrawing funds without clear justification may be acting outside the document’s authority or violating fiduciary duties, especially if the power of attorney does not expressly allow self-benefiting transfers or gifts.

South Carolina law also matters because co-agents do not get a free pass simply because they are both named in the document. If one agent accepted appointment, that agent had a duty to act in good faith, stay within the granted powers, and keep records of receipts, disbursements, and transactions. Suspicious transfers to the agent personally can be important because gifts and similar self-benefiting actions often require clear, express authority in the document rather than a broad assumption of power.

If the concern is capacity, useful proof often includes the timing of the signing, the principal’s ability to understand the document that day, witness observations, medical records, and whether anyone pressured the principal during execution. If the concern is misuse, the key proof usually includes bank records, missing documentation, unexplained withdrawals, and the co-agent’s failure to account. For a broader comparison of court involvement versus private authority, see Power of Attorney vs. Guardianship in South Carolina for an Elderly Family Member With Cognitive Decline.

Process & Timing

Who files: an interested person allowed under South Carolina law, which may include a parent, adult family member, fiduciary, caregiver, or another person with sufficient interest in the principal’s welfare. Where: the court in the South Carolina county connected to the principal. What: a petition asking the court to construe the power of attorney, determine its validity, review the agent’s conduct, require an accounting, or grant other appropriate relief. When: as soon as there is a real concern about capacity at signing or ongoing financial misuse; no single statute in this sub-issue creates a short fixed filing deadline, but delay can make records harder to obtain and losses harder to stop.
The court may require notice, set a hearing, and review the document, witness information, medical evidence, and financial records. If the dispute centers on missing records, the court can focus on whether the agent kept the transaction history South Carolina law requires.
The final step may be an order confirming the power of attorney, limiting it, finding it invalid, directing the agent to account, or granting other relief aimed at protecting the principal and the principal’s property. In some cases, a separate guardianship or conservatorship filing may also be needed if the principal currently cannot manage personal or financial affairs.

Exceptions & Pitfalls

A power of attorney is not automatically invalid just because the principal later developed dementia or another impairment. The key question is capacity at the time of signing.
A bank may continue to honor an acknowledged power of attorney unless it has actual knowledge that the document is invalid or that the agent is acting improperly, so informal complaints alone may not stop transactions.
A common mistake is focusing only on suspicious withdrawals without first reading the document. Some powers are broad, but self-dealing, gifts, and similar transfers often require express authority. For more on co-agent disputes, see How to Challenge a Co-Agent for Suspected Power of Attorney Misuse in South Carolina.

Conclusion

Yes. In South Carolina, a power of attorney can be challenged if the principal lacked capacity when signing, if the document was not properly witnessed and acknowledged or proved, or if an agent later exceeded the authority granted. When suspicious self-transfers or unexplained withdrawals appear, the key next step is to file a petition asking the court to review the agent’s conduct and seek relief as soon as possible.

Talk to a Guardianship Attorney

If a South Carolina power of attorney may have been signed without capacity or an agent appears to be misusing funds, our firm can help evaluate the document, explain the court process, and identify the fastest way to protect the principal and preserve financial records.

Disclaimer: This article provides general information about South Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed South Carolina attorney.