By Ronald A. Fatoullah, Esq. and Debby Rosenfeld, Esq.
{3:46 minutes to read} When offering legal advice, one of the first things we recommend to our clients is that they must have a well-drafted power of attorney. A power of attorney is a document whereby the person signing the power (the "principal") authorizes another person or persons (the "agent(s)") to sign and act on his or her behalf with respect to financial matters.
Having a power of attorney is imperative in case an individual should become incapacitated in the future. At such time, the individual may no longer be able to oversee his own finances, and having appointed an agent to do so will allow for the continuity of asset and income management without interruption. A power of attorney can also eliminate the need for a court-appointed guardian should the principal become completely incapacitated.
When preparing a power of attorney, a great deal of thought must be given to who should be appointed as agent. The New York State General Obligations Law dictates that the appointed agent has a fiduciary responsibility to the principal. This means the agent must always have the principal's best interest at heart and must act in a prudent way that benefits the principal.
Nonetheless, the power of attorney does offer broad powers, and an agent is given a large degree of leverage. When an individual becomes incapacitated, the transfer of such person's assets might be necessary. Complex planning may be involved in order to preserve the person's assets. Accordingly, a carefully drafted power of attorney should be extremely comprehensive, allowing the agent to do extensive planning, if necessary.
In appointing an agent, the critical element is one of trust. If the principal trusts the appointed agent, it is not as important for him to understand the intricacies and nuances of advanced Medicaid planning. He can simply rest assured that since the document contains extensive powers, the appointed agent will be able to act on his behalf, should the need arise.
It is worth mentioning a news story in connection with this discussion. In 2007, Nicholas DeTommaso, then his in the early 80s, appointed Pamela Becker, aged 62, as his agent under a power of attorney. Two years later, Ms. Becker used the power of attorney to arrange for Mr. DeTommaso to legally adopt her. Mr. DeTommaso died one month after the adoption, and Ms. Becker took over the lease to his Long Island City apartment for which he was paying $100 a month. The State Division of Housing and Community Renewal ruled that Ms. Becker was not entitled to the apartment because she only had lived there as a family member for 22 days before Mr. DeTommaso's death and not the two years required by New York State. Ms. Becker refused to move out and has been fighting this determination, claiming she is a family member.
This story illustrates how vital it is to appoint a trustworthy party as agent; one who will not use the form to advance and promote his or her own financial interests. An experienced elder law practitioner will be able to guide you in the preparation of a power of attorney as well as other important legal documents.
Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Debby Rosenfeld, Esq. is a senior staff attorney at the firm. The law firm can be reached at 718-261-1700, 516-466-4422, or toll-free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also the co-founder of JR Wealth Advisors, LLC. The wealth management firm can be reached at 516-466-3300 or 800-353-3775.
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