To remove the Principle from temporay living arangements of another family members home which has no POA what so ever, to hold the Principle whom suffers from Alzhiemers and the family member is pretty much stilling money from the Principle saying the principle whom is not in the right frame of mind okayed and signed 2 of her personal checks and without consent from the Agent who has DPOA of the Principle. The Police department told Agent that the DPOA that we had notarized was not legal and had to be filed in a court of law. Is this true in the state of California. Please advise. So we can take further legal actions and prosecute other family member who has no POA at all.
If she was competent at the time the document was signed but has become incapacitated since then, there has to be proof of that. Typically it is medical documentation and a court finding.
Not everyone who has dementia is incompetent to sign a will or execute a POA. As Glad points out, dementia covers a huge range of competency levels.
So, you think she is unable to make daily life decisions, but is there some official confirmation of that?
But the real issue here is whether other relatives are exploiting her financially. Do you have evidence of that?
POA does not generally mean that the Principal can no longer sign her own checks and spend her own money, unless the Principal is incapacitated as describes in the POA document.
If other family members are stealing from the principal, whether they have POA or not, they should be reported. It sounds like you reported them to the police but they declined to investigate. (I don't think California requires DPOA documents to be registered, but perhaps the police were referring to the principal needing to be declared incompetent by a court of law before the DPOA could stop him or her from signing her own checks. That is true.)
You could report your suspicions to Adult Protective Services. They would be concerned if a vulnerable adult were being financially exploited. You will need to have some evidence to convince them this should be investigated.
If principal (let's call him/her "Pat") is living in someone's home, that someone can legally charge reasonable room-and-board. Pat can write them a check for that. Pat can give them money to meet his/her needs, such as picking up drugs or ordering her a new television. Those expenses would be considered above-board, unless they were exorbitant and exploitative. Pat could even give those people a monetary gift, but again if this were a very large amount it might signal some problems.
So before you call APS, it would be a good idea to find out what those checks were written for, and to document any other evidence that these relatives are taking advantage of Pat. It would also be wise to know what Pat's attitude toward this is. They will interview Pat.