The Bad Niece

Ella Moffett was 95 years old and recuperating in a nursing home after injuring her arm in early 2011. Ella’s niece, Liz Banks, lived nearby and was giving Ella some help. To make management of her affairs easier, Ella appointed Liz as her agent under financial power of attorney. Near the time of the signing of the financial power of attorney, Ella also allegedly fired her longtime financial advisor.

Liz immediately transferred $7,170 from Ella’s bank account to her own. After that, Liz and her boyfriend used that money to pay for personal expenses including rent, groceries, electric, cable, car insurance, tires, parking, and gas. They also claimed they used the money for legal fees, as well as fees for the recorder of deeds office to protect Ella from her financial planner, who they viewed as a predator.

In addition, due to several prescription medications she was on at the time, Ella testified that she did not remember signing those documents and that she certainly did not authorize the gift of $7,170 to her niece.


In most states, there are laws prohibiting an agent under a power of attorney from engaging in so-called “self-dealing” actions. This includes gifts such as the one that Liz received, as well as other transactions that benefit people in her position.

The court, in the case Moffet v. Banks, ruled that Liz was not able to prove that element to give her the gift, and that the documents that Ella signed were not sufficient to prove that this money is a gift.

If you have an older relative, be it an aunt, uncle, or a parent who gives you a gift, you must be very careful. Situations like what occurred with Ella and Liz happen frequently, and the courts are very protective when gifts are given. If you receive a gift, make sure that the person giving you the gift is competent enough to do so and that you have independent evidence that the person person giving the gift has independent advice regarding the validity of the gift. Otherwise, it can and will be challenged in court later at great expense.