What steps are required to rescind a power of attorney after the principal has started losing capacity? – North Carolina

Short Answer

In North Carolina, only a principal with legal capacity can revoke a power of attorney by signing a written revocation and giving actual notice to the agent and third parties. If capacity is declining or doubtful, an interested person (such as an adult child) should file in the Clerk of Superior Court to (1) start a guardianship case and (2) seek judicial relief under the power of attorney statute to compel an accounting and suspend, limit, or terminate the agent’s authority once a guardian is appointed. The court can also enter emergency orders to protect the principal’s property.

Understanding the Problem

Question: In North Carolina, how do family members address a sibling’s power of attorney when a parent with early-stage dementia has begun losing capacity, and a different guardian is more appropriate? The issue sits at the intersection of guardianship and powers of attorney. The key decision point is whether the parent still has enough capacity to revoke; if not, court oversight through the Clerk of Superior Court becomes necessary.

Apply the Law

Under North Carolina law, a competent principal may revoke a power of attorney at any time by a signed writing and providing notice. When capacity is impaired, the path shifts to the courthouse: the Clerk of Superior Court can hear petitions to compel an agent’s accounting and, once a guardian of the estate or general guardian is appointed, limit, suspend, or terminate the agent’s authority. Claims for money damages against an agent proceed in Superior Court, not before the clerk.

Key Requirements

• Capacity to revoke: The principal must understand the act of revocation for a direct, private revocation to be effective; otherwise, court intervention is required.
• Judicial relief route: An “interested person” has standing to petition the Clerk of Superior Court to compel an accounting and to seek limits, suspension, or termination of the agent’s authority after a guardian is appointed.
• Guardianship threshold: The court must find the principal cannot manage property/affairs before appointing a guardian of the estate or a general guardian.
• Notice and effectiveness: Revocations and court orders must be delivered to the agent and third parties (banks, advisors); if the original power of attorney was recorded, record the revocation or court order.
• Forum and venue: File before the Clerk of Superior Court; venue generally includes the county where the principal resides, an agent resides, or the principal’s property is located.
• Remedies and limits: The clerk can order accountings and regulate the agent’s authority; separate claims for monetary damages are filed in Superior Court.

What the Statutes Say

• North Carolina Gen. Stat. § 32C-1-116 (Judicial relief; proceedings) – Clerk may compel accountings; after a guardian is appointed, the court may limit, suspend, or terminate agent authority; sets venue and jurisdiction rules.
• North Carolina Gen. Stat. § 32C-1-117 (Agent’s liability; remedies) – Defines breach of fiduciary duty by an agent and authorizes remedies, including restoration of property.
• North Carolina Gen. Stat. § 32C-1-114 (Agent’s duties; records; disclosure) – Requires recordkeeping and allows court-ordered disclosures and accountings.

Analysis

Apply the Rule to the Facts: With early-stage dementia, the parent may or may not still have capacity to revoke. If capacity remains, a signed revocation delivered to the sibling-agent and to banks and advisors can end the authority. If capacity is uncertain or waning, an adult child as an “interested person” can petition the Clerk to (a) compel an accounting and (b) once a guardian is appointed, limit, suspend, or terminate the sibling’s authority. If misuse is suspected, the court can issue interim protections.

Process & Timing

1. Who files: An interested person (e.g., adult child). Where: Clerk of Superior Court in the county where the parent resides (or where an agent resides or property is located). What: (a) Petition for Adjudication of Incompetence and Application for Appointment of Guardian (AOC‑SP‑200) and (b) a petition under G.S. 32C‑1‑116 to compel an accounting and to limit, suspend, or terminate agent authority after a guardian is appointed; request interim orders if needed. When: File promptly; emergency or interim relief may be available on short notice; regular hearings are scheduled by the clerk and vary by county.
2. After filing, required notices issue; the court may appoint a guardian ad litem; the Clerk holds a hearing on incompetence/guardianship. In parallel or thereafter, the Clerk can order an accounting and enter interim restrictions on the agent when appropriate.
3. Final step: If incompetence is found, the Clerk appoints a guardian of the estate or general guardian and issues Letters of Guardianship. The Clerk may then limit, suspend, or terminate the agent’s authority. Provide certified orders to financial institutions and record any revocation/order if the power of attorney was recorded.

Exceptions & Pitfalls

• Only a competent principal can revoke privately; family members cannot “sign for” a revocation without a court order.
• If the power of attorney was recorded, record any revocation or court order to put third parties on notice.
• Accountings can be compelled even if the document waives accountings; do not assume a waiver blocks court oversight.
• Money damages against an agent (e.g., for breach of fiduciary duty) must be filed in Superior Court; the Clerk handles accountings and authority issues.
• Third parties may rely on a power of attorney until they receive actual notice of revocation or limitation; promptly deliver certified copies of orders.
• Appointment as guardian is not automatic for the petitioner; the Clerk selects a suitable guardian in the principal’s best interests.

Talk to a Guardianship Attorney

If you’re dealing with a contested power of attorney and a loved one’s declining capacity, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North 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 North Carolina attorney.