Dear Friends,

How does that old expression go? Man plans, and God laughs. I had planned to begin a series on the basics of life-planning documents shortly after the New Year began, but here we are after Valentine’s Day. Apologies!

I had conceived of this series because, while giving presentations late last year to seniors and social workers on the subject of life-planning documents, I was reminded of how much confusion exists among non-lawyers about the nature and purpose of these documents. Just to remind you, these documents are:

• The last will and testament
• The durable power of attorney
• The healthcare proxy
• The living will
• The control of body form

Not long ago I wrote about the last will and testament, a piece that you can read both on my blog, here, or on Lawhelp’s RealNY site, here. Next up, therefore, is the durable power of attorney — a document that is, for many of the seniors we serve, more complicated and more important than the will.

What is a durable power of attorney?

Before I answer this question, I would like to declare my dislike for the name of this document. A name should tell you what a thing does, don’t you think? I tip my hat to the NYC Department of Finance for having renamed SCRIE the Rent Freeze Program, on the theory that people immediately get the meaning of the phrase. So I wish that New York would rename the power of attorney, the, I don’t know, Handle My Affairs Document. Because that’s essentially what a power of attorney is for.

Many of us will reach a point in life where we can no longer handle many, or all, of our affairs. Sometimes this happens slowly, such as where a person contracts Alzheimer’s dementia. Other times it happens like a lightning bolt, where someone suffers a stroke and is left incapacitated. A power of attorney allows someone, called the principal, to name another person, called the agent, to handle the principal’s affairs in the event that the principal cannot handle them him- or herself.

Can an agent handle romantic affairs?

Well, no, but just about anything else. Many people think that a power of attorney’s purpose is to allow someone else to “pay your bills” — and this can be very true. But a power of attorney can be much more powerful than that. Depending on how the power of attorney is prepared, it can give the agent the power to do all sorts of things besides writing a check to Con Edison. This is fortunate, because there are many important things that we do in our lives that we couldn’t do if we were incapacitated.

What is not fortunate is that, whereas low-income seniors are the least likely to prepare a power of attorney, they often are required to sign documents that middle-class elders don’t have to worry about. You can easily imagine a senior who not only pays various bills by check every month, but who also must periodically:

• Sign a Mitchell-Lama apartment income affidavit
• Sign a SCRIE re-certification form
• Re-certify for SNAP benefits and Medicaid

Another senior might need to re-certify annually for Section 8, or sign a rent stabilized renewal lease, or sign an income affidavit relating to her tenancy in public housing.

And there are other important items requiring a signature that arise from time to time that an incapacitated senior cannot not handle. For instance, when a married person reaches retirement age and wants to collect a private pension, the pension company may require the spouse’s signature on a form. If the spouse is incapacitated, a power of attorney agent can sign that form — along with her checks, leases, and re-certification documents.

Isn’t a power of attorney a license to steal?

Many people are surprised to learn that the standard NY power of attorney form becomes effective the moment that the principal signs it — meaning that the agent, once he or she has signed it too, can immediately waltz off to the bank and clean out the accounts. It would of course be illegal for someone to take money or property with a power of attorney while not acting in the best interests of the principal (see below for more on that), but good luck getting the money back once the evil agent has flown off to Vegas. For this reason, a person considering signing a power of attorney needs to think very carefully about whom to name as agent. And if there is no one to name who is absolutely trustworthy, then a power of attorney is probably just not a viable option.

What’s “durable” about a durable power of attorney?

If someone has signed a power of attorney, the document is usually a “durable power of attorney.” It’s not that the document is printed on sheets of titanium. Rather, “durable” refers to what happens when the principal becomes incapacitated: Nothing. A durable power of attorney goes into effect when signed and remains effective until the death of the principal (unless revoked), regardless of whether the principal someday loses capacity.

There is, by contrast, such a thing as a “springing power of attorney,” which springs into life once the principal becomes incapacitated. Many lawyers — myself included — counsel against this document, for two reasons. First, if you don’t trust your agent now, why would you trust that person when you’ll be incapacitated and unable to protect yourself from him or her? And, second, in order to use a springing power of attorney, the agent would need to convince the bank (and whoever else) that the principal is incapacitated — requiring letters from doctors who may be reluctant to get involved, or who may disagree with the agent as to whether the principal has become incapacitated.

Regardless of which type of power of attorney is signed, the principal remains in charge of his or her affairs for as long as he or she has capacity, and the principal can revoke the document at any time, for any reason.

Is a lawyer needed to prepare a power of attorney?

In a word: Yes.

There was a time when a New Yorker could prepare her own power of attorney without the assistance of a lawyer and be reasonably sure that she’d done a good job of it. No more. That era ended with the infamous Brooke Astor case, in which the philanthropist’s son was convicted of using a power of attorney to steal millions of dollars from her while she suffered from Alzheimer’s Disease. As a result of that case, the state legislature several years ago radically overhauled the NY power of attorney law with a mind to making fraud harder to commit, and the resulting form is much, much more complex than the old one.

The new form is longer (click here to check out the NYS Bar Association’s forms), it has lots of confusing bits and pieces, it needs to be initialed all over the place, it has two separate parts (one of which needs to be witnessed like a will), and, most challenging of all for the layperson, it lacks certain extra language that’s usually necessary to include if the agent should need to enroll the principal in a pooled trust for Medicaid. Even seasoned lawyers preparing a New York power of attorney for the first time inevitably have questions about its content, or the proper way to execute it. So our advice is: Don’t try this alone!

What if someone never executes a power of attorney?

The answer is — nothing, so long as the person is lucky enough never to become incapacitated. I haven’t read statistics on this, but I’d bet that as people are now living longer and longer, their chances of experiencing incapacity are increasing, which makes executing a power of attorney increasingly important. Because the alternative to a power of attorney is a petition for guardianship in NYS Supreme Court — a potentially long, expensive, and upsetting experience that’s best avoided, and about which I’ll write more on another occasion.

How can the VOLS Elderly Project help?

I’m glad you asked! Eligible seniors can have life-planning documents like a power of attorney prepared free of charge by volunteer lawyers through the VOLS Elderly Project. So, social workers and caseworkers, please continue to talk up this service with your clients, and to refer them to us via our free legal clinics or via a direct referral by fax or e-mail. And, as always, don’t hesitate to call or e-mail me or Vanessa Diaz with any questions or concerns.

Next up — the healthcare proxy!

All the best,
Alex