Protecting Your Life Savings

COMMON ERRORS IN THE PREPARATION AND EXECUTION OF DURABLE POWERS OF ATTORNEY AND HEALTH CARE PROXIES

*By: Anthony J. Enea, Esq.

During the last decade, the preparation and execution of Health Care Proxies and Durable Powers of Attorney has become a common place and routine part of the practice of law.  The regularity and frequency of their execution has not been limited to elder law and trusts and estates practitioners or, for a matter of fact, to attorneys.  I would venture to say that most Health Care Proxies are executed by laypersons at hospitals and other medical facilities and that a significant number of Short Form Powers of Attorney are also prepared and executed by laypersons.  Unfortunately, as is often the case, when documents of a relatively simple, but extremely important nature are prepared and executed so routinely, and by laypersons, the frequency of errors dramatically increases.

For example, with respect to the Health Care Proxy, it is with alarming regularity that I have seen Health Care Proxies which appoint more than one person as co-agents/proxies.  This is not permitted by '2981 of the Public Health Law.

The statute provides that only one agent/proxy at a time can be appointed to act.  Of course, alternate agents/proxies can be nominated.  This error is commonly seen in Health Care Proxies that are prepared in a hospital or other medical facility.  Furthermore, the statute also specifically prohibits the agent/proxy from acting as one of the two required witnesses to the Health Care Proxy.  Again, this error is often seen in Health Care Proxies prepared by laypersons.

One potentially dangerous practice that I have observed is the preparation of Health Care Proxies which contain highly specific and detailed instructions as to which types of medical treatments the client wants or does not want the agent/proxy to authorize.  An example is, where the proxy states that there shall be no artificial respiration, no cardiopulmonary resuscitation, no antibiotics and no blood transfusions.  As to artificial nutrition and hydration (nourishment and water provided intravenously or by a feeding tube), the agent must know the client=s wishes.  While these specific instructions are often driven by the wishes of the client, the attorney should alert the client that such specificity could potentially handcuff the proxy/agent into making decisions which he or she otherwise knows are inconsistent with the client=s stated wishes.  Additionally, specificity as to various medical treatments or procedures wanted or not wanted, allows for the possibility that treatments or procedures not yet even in existence at the time the proxy is executed, may become impediments to the agent/proxy enforcing the client=s wishes.  It is, in my opinion, a significantly more prudent course for the attorney to counsel the client to give the agent/proxy the broadest authority possible.  This can be accomplished by having the following statement in the Health Care Proxy: AI have discussed my wishes with my health care agent and alternate and they know my wishes including those about artificial nutrition and hydration@.

As to the Power of Attorney, a common oversight committed by many attorneys in the preparation of the Statutory Short Form Power of Attorney (G.O.L. '5-1501), pursuant to '5-1502M of the General Obligation Law, in order for an attorney-in-fact to make gifts of the principal=s assets, specific language must be contained in the Power of Attorney granting the attorney-in-fact the power to gift.  For example, in the most commonly used Blumberg Durable Short Form Power of Attorney, letter (AM@) contains the following language: Amaking gifts to my spouse, children and more remote descendants, and parents, not to exceed in the aggregate $10,000 to any person in any year.@  While at first glance it may seem that this language is sufficient, in reality it may prevent the agent from engaging in necessary Medicaid, Estate and Gift Tax Planning for a principal who is unable to make his her own financial decisions.  The gifting language in letter (AM@) of the Short Form Power of Attorney, in my opinion, is simply too restrictive.  It is much more prudent to allow the agent a broader gifting power than that provided in the form.  While I recommend that the principal give the agent whom he or she has a great deal of confidence in, unlimited discretion to make gifts, the comfort level of doing so will vary on a case-by-case basis.  Unfortunately, many attorneys routinely rely on this Blumberg form without any modifications thereto because of its ease of use and convenience.  While there is absolutely nothing wrong with the form, it should be explained to the client that it contains a significant restriction on the agent=s ability to gift in the event of the disability or illness of the principal.  On many occasions clients have told me that the limitations of letter (AM@) were not described to them by their attorneys, and unfortunately on a number of occasions a broadly drafted gifting power would have obviated the need for a Guardianship proceeding.

Finally, in preparing a Power of Attorney the attorney should be cautious if the client has Florida Real Property that the client would want his agent to have authority over.  For the New York Power of Attorney to be effective over the Florida Real Property it would need to be executed in conformity with Florida Law.  For example, it must make specific reference to the Florida Real Property in question.

In conclusion, it=s safe to say there is no such thing as a simple form.

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*Anthony J. Enea, Esq. is a member of the firm of Enea, Scanlan & Sirignano, LLP. with offices in White Plains and Somers, New York.  Mr. Enea is certified as an Elder Law Attorney by the National Elder Law Foundation as accredited by the American Bar Association.*  Mr. Enea is the founding Co-Chair of the Elder Law Committee to the Westchester County Bar Association.  He is a member of the Executive Committee of the  Elder Law Section of the New York State Bar Association as Co-Chair of the Guardianship and Fiduciary Committee, a member of the Long Term Care Reform Committee of the Elder Law Section, a Vice-Chair of the Committee on the Elderly and Disabled of the Trusts and Estates Section of the New York State Bar Association, and a member of the National Academy of Elder Law Attorneys.  Mr. Enea is also fluent in Italian.

*The National Elder Law Foundation is not affiliated with any Governmental authority.  Certification is not a requirement for the practice of Law in the State of New York and does not necessarily indicate greater competence than other attorneys experienced in this field of law.

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