By: Anthony J. Enea, Esq.
Unfortunately in our litigious society, it has become commonplace for siblings, family members and friends to battle for control of the finances and care of their aging parents and loved ones. While the litigation may on its surface appear to be for the authority to make day to day financial and health care decisions, sadly, often at the root of the litigation is inheritance and monetary control.
It is anticipated that litigation involving aging parents, such as litigated Article 81 of the Mental Hygiene Law ("MHL") guardianship proceedings, will rapidly grow in direct proportion to the aging population of the United States. Additionally, another relevant factor is that the largest transfer of inter-generational wealth, estimated to be approximately 10 trillion dollars, will be transferred from the World War II generation to the "baby boomers". The transfer of such a great amount of wealth will inherently generate additional conflicts and controversies.
Unfortunately, the victim in these controversies is often the family unit. I have witnessed firsthand the bitterness, resentment and destruction of relationships among parents, siblings and loved ones. The effect is best described as a "family divorce", the impact of which may be felt for generations. Fortunately, there are steps that can be undertaken to minimize the risk of such controversies affecting families. As is often the case, it is imperative that the potential solutions be implemented well before the problems begin to manifest themselves. Some potential solutions are:
(a) The execution of a general durable power of attorney, with broad powers being given to the agent. If the general power of attorney is durable, its efficacy will continue even after the subsequent disability or incompetence of the principal. It is best to utilize a customized durable general power of attorney form which grants the agent the broadest powers to act on behalf of the principal, including, but not limited to the powers to engage in various types of Medicaid and Estate planning. In drafting a power of attorney with broad gifting powers it is imperative that one be cognizant of the complex execution requirements of the new General Durable Power of Attorney form which went into effect on September 1, 2009. The new form has a Statutory Major Gifts Rider which must be completed and executed if the Agent will have the authority to gift or change the principal's interest in property. The new form in my opinion should not be executed without the assistance of legal counsel as a result of its many complexities.
The selection of the individual or individuals who will be the named agent(s) under the power of attorney is a decision of great importance. The individual selected must be someone the principal has a great deal of trust and confidence in. If the attorney-in-fact will have broad powers, including broad gifting powers, the principal should give serious consideration to the appointment of two (2) attorneys-in-fact who will be required to act jointly. In spite of the potential administrative difficulties it may cause by requiring that two (2) agents execute all documents, having at least two (2) agents will create a system of checks and balances, and help reduce the likelihood of financial abuse, fraud and self dealing.
(b) Execute a health care proxy, wherein a health care agent is selected. The individual selected is permitted by New York Law to make all health care decisions when the principal is no longer able to make these decisions. The health care proxy can specify which treatments and medical care one wishes and does not wish to have administered. Under New York Law only one health care agent at a time can be designated in the health care proxy. NYS Public Health Law §2981. The principal should take the time to tell his or her agent exactly what his or her wishes are with respect to medical care, and specifically end of life decisions, e.g. hydration and the use of ventilators and respirators. One should provide a copy of the health care proxy to his or her physician.
(c) Execute a living will, wherein one is able to state his or her wishes not to be kept alive by extraordinary measures. While a living will is not statutorily recognized in New York, it is still additional written evidence of one's wish not to be kept alive by extraordinary measures.
(d) Execute a Do Not Resuscitate Order ("DNR") which is a document executed by the individual and his or her physician. The DNR can explicitly specify the circumstance wherein an individual does not want to be resuscitated. I often recommend that the client keep a pocket DNR in his or her wallet and purse, and on the refrigerator and to provide copies to loved ones. It is especially helpful in cases where the client suffers from a chronic and persistent life threatening illness.
(e) Execute a Burial Agent Designation Form wherein you will be able to appoint an agent to dispose of your remains. In said form you will be also permitted to specify where you wish to be buried, any wishes regarding cremation and even the location of your wake and funeral. Public Health Law §4201.
The execution of the aforestated documents will go a long way in obviating the possibility of litigation regarding end of life and burial decisions.
The above referenced forms enable an individual to protect him or herself by enabling the individual to choose a family member or trusted friend to make financial and/or health related decisions if he or she is no longer able to do so.
However, if because of alleged financial, physical or emotional abuse it becomes necessary or inevitable that legal action be undertaken, in most instances, Article 81 of the Mental Hygiene Law for the appointment of a guardian will be the appropriate legal proceeding. Typically allegations are made that a physically or mentally incapacitated person is the victim of financial or physical abuse. The Petition in the Article 81 Guardianship proceeding will seek to obtain control over the person and property of the alleged victim of abuse by seeking a determination that the person is an "incapacitated person" as defined by Article 81. The Petition can also seek to void documents and contractual arrangements entered into by the alleged incapacitated person.
As part of an Article 81 proceeding the Courts have voided powers of attorney, health care proxies, Trusts, and Last Wills and Testaments executed by the incapacitated person and have also voided transfers of assets made by the incapacitated person.
From the above stated I believe it is sufficiently clear that taking appropriate steps to prevent clashes by family members of one's assets is imperative. However, if a clash is inevitable Article 81 of the Mental Hygiene Law will serve as a powerful vehicle to help rectify any wrong doing.