Court Case Illustrates the Danger of Using an Online Power of Attorney Form

A recent court case involving a power of attorney demonstrates the problem with using online estate planning forms instead of hiring an attorney who can make sure your documents are tailored to your needs.

Mercedes Goosley owned a home in Pennsylvania. In 2013, she named one of her six children, Joseph, as her agent under a power of attorney using a boilerplate form that Joseph downloaded from the internet. Unbeknownst to Joseph, the power of attorney required Mercedes to be declared incompetent for Joseph to act as her agent.

Powers of attorney can be either immediate or springing. An “immediate” power of attorney takes effect as soon as it is signed, while a “springing” power of attorney only takes effect when the principal becomes incapacitated. The problem is that springing powers of attorney create a hurdle in order for the agent to use the document. When presented with a springing power of attorney, a financial institution will require proof that the incapacity has occurred, often in the form of a letter from a doctor.

In this case, Joseph began acting for Mercedes without getting a declaration of her incompetency. After she moved into a nursing home, Joseph listed her home for sale and accepted a purchase offer as agent for his mother under the power of attorney. At the time, Joseph’s brother, William, was living in the home, and Joseph instructed William to move out. This resulted in a dispute that ended up in court, with William arguing that Joseph did not have authority to act as his mother’s agent. A Pennsylvania appeals court eventually determined that Mercedes had intended to execute an immediate power of attorney as evidenced by the fact that Joseph had held himself out as Mercedes’ agent since 2013 and routinely conducted affairs on her behalf without Mercedes restricting or objecting to his agency.

While the court ultimately ruled in Joseph’s favor, Joseph and Mercedes could have saved time and money by consulting with an attorney before signing the power of attorney. An attorney would have been able to explain the difference between an immediate and springing power of attorney and tailor the power of attorney to Mercedes’ needs.

A properly drafted Power of Attorney is one of the most useful and important estate planning documents that a person can have. It can mean the difference between your agent having the authority and access to information  to act on your behalf quickly in an emergency and the alternative of  expensive and time-consuming court procedings to appoint a guardian and conservatorship.  Don’t make the mistake of using a form from the internet or trying to prepare a “do-it-yourself” legal document. When you meet with us  for an estate planning consultation, we will take the time to explain the provisions that you should  have in your Power of Attorney. We will prepare the document so that it meets your specific needs and circumstances, during periods when you are healthy and capable and also during any future times should you become unable to make decisions for yourself.

If you have specific questions about your situation or would like to learn more, reach out to the team at WBH here.

Read more articles:

In 2022, Social Security Beneficiaries Will See the Biggest Increase in 39 Years

The year was 1983: The U.S. invaded Granada. A gallon of gas cost 96 cents. Michael Jackson’s ‘Thriller’ video premiered. That year was also the last time that Social Security recipients saw a cost-of-living increase steeper than the one just announced for 2022. This...

Take These Three Steps When Your Child Turns 18

If your child has reached the teenage years, you may already feel as though you are losing control of her life. This is legally true once your child reaches the age of 18 because then the state considers your child to be an adult with the legal right to govern his or...

Why Small Business Owners Need an Estate Plan

Running a small business can keep you busy, but it should not keep you from creating an estate plan. Not having a plan in place can cause problems for your business and your family after you are gone.   While an estate plan is important for everyone, it is especially...

When Can Someone Be Declared Legally Incompetent?

If a loved one is experiencing memory loss or suddenly making poor decisions, you may be in a situation where it becomes necessary to ask the probate court to appoint a guardian and/or a conservator for them. This is a complicated process, so we strongly encourage our...

How Do You Choose the Right Person for Your Power of Attorney?

A Power of Attorney is a document that authorizes someone to represent and act on your behalf should you not be in a position to do it. The person you name to act on your behalf is known as the “agent.”  Your agent may need to sign contracts, handle investments, sell...

Medicaid’s Attempt to Ensure the Healthy Spouse Is Not Impoverished: The CSRA

Medicaid law provides special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving long-term care benefits, usually in a nursing home....

Medicaid’s “Snapshot” Date and Its Crucial Impact on a Couple’s Financial Picture

When a married couple applies for Medicaid, the Medicaid agency must analyze the couple’s income and assets as of a particular date to determine eligibility. The date that the agency chooses for this analysis is called the “snapshot” date and it can have a major...

The Difference Between Elder Law and Estate Planning

Elder law and estate planning serve two different--but equally vital--functions. The main difference is that elder law is focused on preserving your assets during your lifetime, while estate planning concentrates on what happens to your assets after you die.  Elder...

You Can ‘Cure’ a Medicaid Penalty Period by Returning a Gift

Anyone who gifted assets within five years of applying for Medicaid may be subject to a penalty period, but that penalty can be reduced or eliminated if the assets are returned.  In order to be eligible for Medicaid, you cannot have recently transferred assets....

Preserving the Family Vacation Home for Generations to Come

Summer is winding down and if you are one of the lucky ones, you got to spend some time at a family vacation home. How do you make sure your children and grandchildren can enjoy that second home as much as you did? The question for owners of vacation homes in planning...