A Power of Attorney is a document that can be both useful and misused. New York General Obligations Law (“GOL”) section 5-1501 and the sections of the law that follow set forth the basic provisions regarding the Power. Paragraph 2(j) of Section 5-1501 defines the Power of Attorney as “a written document . . . .by which a principal with capacity designates an agent to act on his or her behalf.”
A New York Estate Lawyer is familiar with the use of the Power in estate and advanced planning. When the principal appoints an agent, the appointed party is given the various powers or authority that are specified in the Power. In the event the principal becomes incapacitated or unable to handle his property management functions the Power enables his agent to act on his behalf. The existence of a valid Power may obriate the need for an Article 81 Guardianship proceeding.
It is imperative that a person who is designated as an agent under the Power be trustworthy and expected to act in the best interests of the principal. There have been numerous instances where the creation and/or use of a Power has resulted in abuse and improper acts. For example, there have been many cases where, during the course of an Article 81 Guardianship proceeding, the Court has used its authority under Mental Hygiene Law section 81.29 to revoke a Power. In these instances the Court would have found that the Power was signed at a time when a person lacked capacity or that the agent was improperly exercising his authority.
During the course of estate settlement and estate accounting proceedings, the Surrogate’s Court can also review the proprietary of actions that have been taken by an agent. Recently, in the Matter of Julius Gargani, decided by Nassau Surrogate Edward McCarty III on March 31, 2014, the Court was asked to review a series of questionable acts by an agent. It appears that prior to the death of the decedent the decedent’s agent closed a number of the decedent’s “in trust for” accounts that would have passed directly to named beneficiaries upon the decedent’s death. The agent then deposited these funds into accounts in the decedent’s name without any beneficiary designation. The result was that when the decedent died these funds went into the decedent’s administration estate and then passed to the agent who was the residuary beneficiary under the decedent’s Last Will. Since the agent’s acts appeared to be intended to benefit the agent, the Court had authority to review the propriety of these transactions.
A Power of Attorney can be very useful as a tool in an overall estate plan. However, the possibility for abuse is always present when a person gives another the right to control financial affairs. I have represented numerous individuals in matters where a Power has been obtained or use improperly. I have also helped clients in both Guardianship proceedings and Surrogate’s Court proceedings evaluate, and in some cases obtain Court revocation of, a power of attorney where improper conduct has occurred.
New York City Trusts and Estates Lawyer Jules Martin Haas, Esq. has been representing clients in Probate and Estate Administration proceedings throughout the past 30 years. He is available to help residents in many areas, including the Bronx, and Westchester counties. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation or e-mail me at firstname.lastname@example.org.
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