What Legal Procedures Apply When Contesting a Transfer Made Under a Durable Power of Attorney? – South Carolina

Short Answer

South Carolina allows certain interested persons to file a summons and petition asking the probate court or circuit court to review an agent’s conduct and grant appropriate relief. The challenger generally must show that the agent lacked authority, exceeded the document’s limits, violated fiduciary duties, or acted after the authority ended. Available relief may include an accounting, an order stopping further transfers, return of property, or monetary recovery.

Understanding the Problem

The issue is whether a person with standing can contest a South Carolina property transfer made by an agent under a durable power of attorney and obtain relief from the proper court. The central decision turns on the agent’s authority and conduct at the time of the transfer. Durability means that the authority can continue during the principal’s incapacity; it does not give the agent unlimited power or allow the authority to continue after the principal’s death.

Apply the Law

South Carolina law separates an agent’s ability to perform a transaction from whether the agent exercised that authority properly. The probate court and circuit court have concurrent jurisdiction over the creation, interpretation, exercise, and termination of powers of attorney. A qualifying petitioner may ask the court to interpret the document, review the transfer, order an accounting, and grant other appropriate relief.

Key Requirements

Standing to file: The petitioner must fall within a category authorized by South Carolina law. This may include the principal, a fiduciary acting for the principal, certain close relatives, a presumptive heir, a financially interested beneficiary, a caregiver with sufficient interest, or the principal’s personal representative after death.
A valid ground for challenge: The transfer must have exceeded the written authority, violated a restriction, occurred after termination, or breached duties such as loyalty, good faith, proper recordkeeping, and acting in the principal’s best interest.
Proof connected to the transfer: Relevant evidence commonly includes the complete power of attorney, deeds or account records, transfer documents, communications, the principal’s estate plan, and evidence showing who benefited.
Proper parties and service: The agent, recipient of the property, and other persons whose ownership rights may be affected generally must receive the summons and petition.

Transfers that amount to gifts receive close review. Making a gift, changing survivorship rights, or changing a beneficiary designation requires express authority in the power of attorney. Even when the document grants that authority, the agent must follow its restrictions and act consistently with the principal’s known objectives or best interest. General financial language alone may not authorize these estate-changing transactions.

What the Statutes Say

S.C. Code § 62-8-114 (Agent’s duties) – Requires the agent to act within the granted authority, in good faith, and according to the principal’s known expectations and best interest while keeping transaction records.
S.C. Code § 62-8-116 (Judicial relief) – Identifies who may petition a court to interpret a power of attorney or review an agent’s conduct.
S.C. Code § 62-8-201 (Authority requiring a specific grant) – Requires express authority for gifts, survivorship changes, beneficiary changes, and other transactions that can alter ownership or an estate plan.
S.C. Code § 62-8-217 (Gifts) – Restricts an agent’s gifting authority and ties permissible gifts to the principal’s objectives or best interest.
S.C. Code § 62-8-401 (Jurisdiction) – Gives South Carolina probate and circuit courts concurrent jurisdiction over power-of-attorney disputes.
S.C. Code § 14-23-280 (Probate proceedings) – Provides for commencement by petition or complaint, issuance of a summons, service, and an opportunity to answer.

Analysis

Apply the Rule to the Facts: Because no particular transfer facts are provided, consider a transfer labeled as a gift to the agent when the document contains only general banking authority. The express-authority requirement may support setting aside that transfer. If the document expressly permits the gift, the court would still examine whether the agent followed the document, acted loyally, considered the principal’s needs, and maintained supporting records.

A different result may follow when an agent sells property for fair value, deposits the proceeds into the principal’s account, and documents that the sale funded the principal’s care. That evidence may show authority, a proper purpose, and compliance with the agent’s duties. The person challenging the transaction can learn more about the evidentiary issues in this related discussion of challenging asset transfers made under a South Carolina power of attorney.

Process & Timing

Who files: A person authorized by Section 62-8-116. Where: The South Carolina Probate Court in the appropriate county or, when appropriate, the circuit court. What: A summons and petition identifying the power of attorney, transfer, legal grounds, affected parties, and requested relief. When: File promptly after discovering the transaction because a three-year limitations period may govern claims involving fraud, injury to rights, conversion, or statutory liability, although the exact deadline depends on the claims and discovery facts.
Serve the affected parties: The petitioner generally serves the agent, transferee, and other parties whose rights may be affected. A respondent usually has 30 days after service to answer under the civil rules that govern formal probate proceedings, but the summons and any court order control.
Seek records and interim protection: The parties may use discovery, subpoenas, and a request for an accounting. If the principal, an authorized fiduciary, a protective agency, or the personal representative after death requests records under Section 62-8-114, the agent generally has 30 days to comply or explain in writing why more time is needed, followed by no more than an additional 30 days unless the court directs otherwise. When property remains at risk, the petition may request temporary relief against another transfer.
Prepare for a hearing or trial: The court considers the document, transfer records, testimony, the principal’s known wishes, the purpose of the transaction, and any benefit to the agent. The court may interpret the power, order an accounting, stop further conduct, restore property or its value, and award other relief supported by the pleaded claims.

Exceptions & Pitfalls

Standing and accounting rights differ: South Carolina gives a broad group of people standing to request judicial review, but fewer people may demand records directly from the agent without a court order. A petitioner who cannot demand an accounting directly may ask the court to order one.
The principal may oppose the case: If the principal moves to dismiss, the court must dismiss the judicial-review petition when dismissal serves the principal’s best interest.
Self-benefit does not automatically prove wrongdoing: The key questions remain whether the agent stayed within the granted authority and complied with mandatory duties. Express authority does not excuse bad faith or disloyal conduct.
Authority ends at death: A durable power of attorney terminates when the principal dies. The personal representative then acts for the estate, although good-faith protections may affect transactions completed without actual knowledge of the death.
Property type matters: A challenge involving a recorded deed may require claims against the recipient and attention to recording records, later purchasers, and possible notice affecting the property.
Old documents and transactions need separate review: South Carolina’s current procedural rules generally apply to newer proceedings, but the law governing the document’s meaning may depend on when it was signed or restated.
Delay can weaken the case: Waiting may allow funds to move, records to disappear, or property to reach another recipient. Death-related estate deadlines and general civil limitation periods may overlap.

Conclusion

South Carolina permits a qualifying interested person to contest a transfer by showing that the agent lacked express authority, exceeded the document, acted after termination, or breached duties owed to the principal. Probate and circuit courts share jurisdiction, and some related claims may carry a three-year deadline measured from actual or reasonably discoverable notice. File a summons and petition with the appropriate South Carolina court promptly after discovering the disputed transfer.

Talk to a Probate Attorney

If a transfer under a durable power of attorney may have diverted property or violated the principal’s wishes, our firm has experienced attorneys who can help evaluate standing, gather records, identify filing deadlines, and explain available court remedies.

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.