Durable Power of Attorney Plus: How to make your POA better

Back on June 5, 2014 I posted a blog called Advance Directives for Lifestyle. My concept was that as we age, we have to think about how our life will be managed by a third party when we aren’t so capable any more, and we should build more instructions into our documents to guide our agents regarding our preferences. Now I have ideas on strengthening the Durable Power of Attorney to build in extra protections for the principal (the person who signs it).

You sign a Durable Power of Attorney while you are still cognizant, so that it is available should you ever become incapable. In signing a POA (or DPOA) you select someone as your agent – your fiduciary – and give them a wide range of powers. You can expand and limit those powers in the document you sign. NJ law doesn’t prescribe the form for the document (unlike some other states) but it does provide some rules. The statute is at NJSA 46:2B-8.1 to 19. For instance, a POA can only be revoked by the person who signed it (you) or by a court “for good cause.” . Also, the agent cannot give away your money (make gifts) unless the document expressly authorizes this to be done.http://law.justia.com/codes/new-jersey/2013/title-46

The POA relationship is based on trust. You select someone you trust who you feel will manage your money prudently for your benefit, and who will take necessary steps to safeguard your legal interest. You are giving them a tremendous amount of power.  Since a person’s overall risk of total disability is high statistically, it is forseeable that if the principal lives long enough, there will be a need for your agent to start acting under the power you’ve given them.

Unfortunately if family members don’t get along, lack of transparency breeds suspicion even when nothing is being done improperly. In other cases,  it does happen from time to time that the agent abuses their authority and leaves the principal in a bad neglected situation without support. So you may want to “hope for the best, but plan for the worst” by building in some protections. Here are my ideas:

Joint Co-Agents: This arrangement ensures joint action by your appointed agents, but can be unwieldy. Make sure your 2 agents really like each other and trust each other.

“Either or” co-agents: This arrangement is more convenient because either person can act on your behalf, but doesn’t require the knowledge of the other agent. Again, select the co-agents carefully.

I’m not a big fan of co-agency so I have other suggestions instead:

Mandatory reports: You can obligate your Agent to provide data, financial records, and other documentation to certain people either upon request or on a schedule.  That in turn would enable them to keep an eye on what is going on and could provide a basis for legal action to protect you.

Require consent of a third party in writing for certain major acts: You could require the agent to confer with and obtain consent from a 3rd party for certain specified decisions such as your relocation, selection of a facility, mortgaging or selling your house, or disposal of certain prized possessions. You would also want to mandate the disclosure of annual tax returns and financial records. You can give the 3rd party the right to sue to enforce these provisions. There is also a statute in NJ called the Protective Arrangements Act which could provide your 3rd party with standing to initiate a suit in these circumstances — NJSA 3B:12-1 to 12-3. .http://law.justia.com/codes/new-jersey/2013/title-3b/section-3b-12-1/

Require that the agent give certain people access to you personally: This can prevent you from becoming isolated in the event of a dispute between your agent and other members of your family or friends.

Your estate and fiduciary planning should be customized for your preferences. Call us to discuss the planning that you need… 732-382-6070.

Agent under Power of Attorney Can’t Stand in for Party to a Divorce Action in NJ

In a decision published yesterday, a New Jersey judge has ruled that a party to a divorce case cannot avoid the need for their personal participation by having their agent under Power of Attorney appear on their behalf. The case of Marisco v. Marisco, Chancery Div.-Ocean Cy., docket no. FM-15-1152-13-N (Jones, L. R., J.S.C.) involved a divorce action between a husband and wife in their 80’s. The husband (defendant) had designated his daughter as his Agent under Power of Attorney, and it was she who signed the Certification to his Answer and Counterclaim. The plaintiff objected, and the court agreed with the plaintiff.

The decision is an interesting review of the limits on the authority of a POA and the general requirements for personal participation in divorce actions by the parties to a divorce, including the potential need for personal testimony at all proceedings.  The Judge ruled  that  unless there has been a finding that a party is “incompetent” (incapacitated) or that a legal guardian needs to be appointed,  the POA can’t testify on the party’s behalf or attest to facts by signing his certifications (unless the other party consents).

One of the reasons discussed by the Judge is that there are rules limiting the admissibility of hearsay in court proceedings, and a witness (such as the person who is the POA) can only testify to matters that are within his or her personal knowledge. If s/he were to testify about things known only to the party, it could be inadmissible hearsay. This would of course deprive the court of necessary facts, would increase the unreliability of the testimony, and would impede the ability of the other party to cross-examine.

On the other hand, if a legal guardian has already been appointed for a person who is now a party to a divorce, the guardian can actually “stand in the shoes of” the incapacitated party. See Kronberg v. Kronberg, 263 N.J. Super. 632 (Ch. Div. 1993) and Kingsdorf v Kingsdorf, 351 N.J. Super. 144 (App. Div. 2002). http://www.leagle.com/decision/1993895263NJSuper632_1840.xml/KRONBERG%20v.%20KRONBERG  and  https://www.courtlistener.com/njsuperctappdiv/8T1R/kingsdorf-v-kingsdorf/

We represent clients of all ages including clients with disabilities in divorce and non-dissolution support actions … call 732-382-6070