Disclaimer

This article is for general informational purposes only and is not legal advice. I am not a lawyer. If you believe a loved one’s legal or financial rights have been violated, consult a New Mexico attorney promptly.

Detailed Answer — What you need to know under New Mexico law

1. Legal grounds to challenge transfers

Under New Mexico law, transfers made by an agent under a power of attorney can be challenged on several grounds, including:

• Lack of capacity: The principal did not have the mental capacity to execute the POA or to understand/authorize the specific transfers when they occurred.
• Undue influence or coercion: Someone improperly pressured the principal to sign the POA or to approve particular transfers.
• Fraud or forgery: The POA or signatures are forged, or the agent misrepresented facts to obtain transfers.
• Agent misconduct or breach of fiduciary duty: The agent acted beyond granted authority, acted for personal benefit, or otherwise violated duties owed to the principal.
• Improper execution: The POA was not signed, witnessed, or notarized as required.

2. Which law applies?

New Mexico has adopted a statutory framework that governs powers of attorney, their creation, scope, and agent duties. Relevant New Mexico statutes are located in the New Mexico Statutes Annotated (NMSA). For the most current statutory language and requirements, consult the New Mexico statutes online: New Mexico Statutes (NMSA). These statutes describe valid execution, agent duties, termination, and other rules that affect whether transfers are valid.

3. Evidence that helps prove lack of capacity

Common sources of evidence include:

• Medical records (physician notes, hospital records, cognitive testing) showing dementia, delirium, or incapacity at the time.
• Contemporaneous notes or statements from family, caregivers, or professionals who observed confusion or impaired decision-making.
• Emails, texts, or recordings that show the principal did not understand transactions.
• Transaction records showing large or unusual transfers inconsistent with the principal’s past patterns or financial needs.
• Expert testimony (medical or forensic) to explain capacity impairments to the court.

4. Where to file and how the court typically handles these claims

Challenges to transfers or to an agent’s authority are usually brought in New Mexico district court. The remedies a court may order include:

• Declaring transfers void or voidable and ordering restitution/recovery of assets.
• Imposing a constructive trust or equitable lien on improperly transferred property.
• Removing or suspending the agent and appointing a guardian/conservator if needed.
• Granting temporary injunctive relief to freeze assets and prevent further transfers while the dispute proceeds.
• Ordering damages or accounting for the agent’s actions.

5. Typical steps to challenge transfers

1. Act quickly: Contact the bank or financial institution to report suspected abuse and ask whether they can freeze accounts or block further transfers pending investigation.
2. Preserve evidence: Secure bank statements, POA documents, emails, and medical records. Take notes of relevant conversations and identify witnesses.
3. Obtain medical records: Request the principal’s medical records covering the time the POA was signed and when transfers occurred. These records are often pivotal to capacity claims.
4. Consult an attorney: A lawyer experienced in elder law, probate, or fiduciary litigation can assess claims, prepare petitions, and ask the court for immediate relief (temporary restraining order or asset freeze) if needed.
5. File a petition in district court: Common petitions include asking the court to revoke the POA, void transfers, remove the agent, and appoint a guardian/conservator if appropriate.

6. Time limits and practical considerations

Statutes of limitations and deadlines can vary depending on the type of claim (e.g., fraud, breach of fiduciary duty, or a challenge to the document’s validity). Because these deadlines can bar recovery, you should act as soon as you suspect wrongdoing. Even if you cannot recover every loss, courts may still provide other forms of relief (removal of agent, future protection).

7. Administrative routes and reporting abuse

If you suspect financial exploitation or elder abuse, you can report to New Mexico Adult Protective Services (APS) or local law enforcement. APS can investigate and may coordinate with financial institutions or prosecutors. Reporting may prompt a quicker administrative intervention while you pursue court remedies.

8. What evidence is often decisive?

Court cases often turn on credible medical evidence about capacity at the relevant time and documentary proof showing transfers were not consistent with prior behavior or best interests. Banks sometimes detect unusual activity and keep records of communications with an agent; these records can help your case.

9. Role of the bank or financial institution

Financial institutions must follow the law and their internal policies. If a bank suspects a POA is invalid or a transaction is suspicious, it may refuse to honor the agent’s transactions or require a court order. Promptly notifying the institution and giving them a copy of any complaint or court filing can help freeze funds.

Helpful Hints

• Gather the POA document and any related documents immediately. Make certified copies.
• Get the principal’s medical records for the months before and after the POA signing and for when the transfers occurred.
• Record names, dates, and details of suspicious transactions — banks, check numbers, wire transfers, and beneficiaries.
• Ask witnesses (family, caregivers, medical staff) to write dated statements about what they observed.
• Contact the financial institution where the transfers occurred and request an immediate account freeze or hold while you investigate.
• Report suspected financial exploitation to New Mexico Adult Protective Services and local law enforcement.
• Talk to an attorney experienced in New Mexico probate, elder law, or fiduciary litigation as soon as possible — many remedies are time-sensitive.
• If emergency relief is needed (risk of further loss), request a temporary restraining order or asset freeze from the district court.
• Keep communications professional and documented. Avoid confrontations with the agent until you have legal guidance.
• Preserve electronic evidence (texts, emails, voicemail) and make backups.

Resources

• New Mexico Statutes (searchable): https://www.nmlegis.gov/Legislation/Statutes — consult the chapters governing powers of attorney, fiduciary duties, and guardianship for statutory requirements and procedures.
• New Mexico Department of Health / Human Services — Adult Protective Services: https://www.hsd.state.nm.us/ (look under protective services or abuse reporting).
• New Mexico courts (self‑help and probate information): https://www.nmcourts.gov/