Can I Challenge a Power of Attorney Misuse Involving My Insurance Money in Texas?
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Reviewed & verified by A. Jason Velez, Esq.*
Managing Attorney, 1LAW · Last reviewed January 1, 2026
Legal Inquiry
Consumer Legal Issue
A power of attorney was used to buy an $80,000 shed with no hot water, using my insurance money from a fire that almost killed me at my home.
Attorney Answer
If a power of attorney was used to spend your insurance money on something you never approved, you may have a real claim against the person who held that authority for breaching their duty to you.
In Texas, powers of attorney are governed by the Durable Power of Attorney Act, which begins at Chapter 751 of the Estates Code. Anyone who acts as an agent under a power of attorney owes the principal, the person who granted the authority, a duty of good faith and must act within the scope the document actually grants and in the principal's best interest. An agent who spends a principal's money on a purchase that was not authorized, or that does not serve the principal's actual needs, can be found to have breached that duty.
Start by pulling your documents together. Locate the power of attorney itself and read exactly what powers it grants, since some are broad and some are limited to specific tasks. Also gather records of the insurance payout, the shed purchase, and any communication about what the money was supposed to be used for. If the shed genuinely lacks basic features like hot water and was sold as move-in ready, Texas consumer protection law may also give you a separate claim against the seller.
What you can do
1. Revoke the power of attorney if it is still active. You can do this in writing at any time you have capacity, and should notify the agent and any third parties, like your insurer, in writing. 2. Ask the agent for a full accounting of how your funds were used. 3. Gather every record tied to the insurance payout and the shed purchase. 4. Consult an attorney about a breach of fiduciary duty claim, since Texas generally requires these claims to be filed within four years of when you discovered or should have discovered the problem.
This is general legal information, not legal advice, and a Texas attorney can review your specific power of attorney document and tell you exactly what options you have.
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Frequently Asked Questions
Can I revoke a power of attorney once it has already been used?
Yes. As long as you have the mental capacity to do so, you can revoke a power of attorney in writing at any time, even after it was used for a transaction you disagree with. Notify the agent and any affected third parties, like your insurer, in writing.
What counts as a breach of fiduciary duty by an agent under a power of attorney?
It generally means the agent spent your money or used their authority in a way that did not serve your best interests or exceeded what the document allowed. If proven, you may be able to recover the misused funds.
Can I also pursue the company that sold the shed?
Possibly, if it was misrepresented as complete or livable and lacks features you were told it would have. An attorney can review the purchase paperwork to see if a separate consumer protection claim applies.
