A power of attorney (“POA”) allows a principal to assign their agent authority to make certain legal and financial decisions on their behalf. Because a POA can give an agent tremendous power over the principal’s affairs, claims of elder abuse in connection with a POA are common. While litigation concerning claims of abuse of a POA often occurs in the context of contested probate proceedings, special proceedings under Mental Hygiene Law (“MHL”) Article 81 (“Article 81”) and the General Obligations Law (“GOL”) increasingly involve claims that an agent is abusing a POA. This post delves into the options available under the MHL and GOL when one suspects abuse of a POA.

Advanced Directives in Guardianship Litigation. Because a guardianship under MHL Article 81 puts the alleged incapacitated person’s (“AIP”) constitutionally protected civil liberties at stake, the goal of Article 81 is to safeguard the AIP and further their best interests using the least restrictive form of intervention (see Matter of Samuel S. (Helene S.), 96 AD3d 954, 957-958 [2d Dept 2012]). Advanced directives, such as a POA or a health care proxy, being less restrictive than an Article 81 guardianship, often eliminate the need for one (see Matter of Isadora R., 5 AD3d 494 [2d Dept 2004]). Yet to obviate the need for guardianship, the advanced directive(s) must be working effectively, and the agent must have acted in the AIP’s best interests (see Matter of Rachel Z. (Jack Z.–Anna B.), 181 AD3d 805 [2d Dept 2020]).

 Appointing a guardian requires a two-pronged determination by clear and convincing evidence. First, that a guardian is “necessary to provide for the personal needs of that person, including food, clothing, shelter, health care, or safety and/or to manage the property and financial affairs of that person,” and second, that the AIP is either incapacitated or consents to the appointment of a guardian (MHL § 81.02[a][1] and [2]; see also Matter of Carole L., 136 AD3d 917 [2d Dept 2016])).  Even if the AIP is cognitively impaired, guardianship may not be necessary if the agent acts in the principal/AIP’s best interest to assist them with their activities of daily living (e.g., cooking, cleaning, bill paying).

Once the Court appoints a guardian, it has discretion under MHL § 81.29(d) to revoke a POA if the principal was incapacitated when the POA was executed or the agent breached their fiduciary duty (MHL § 81.29[d]). In a publicized case, Matter of Goldfein v Kohler, Paulette Kohler’s building manager filed a petition to appoint a temporary guardian for her. NBC New York reported that the petition alleged the agent, under a POA and health care proxy, engaged in elder abuse and was the subject of a criminal investigation. The Supreme Court revoked the advanced directives. But on appeal, the First Department found no evidence of financial impropriety by the agent or that Ms. Kohler lacked capacity when she executed her advanced directives (Matter of Goldfein v Kohler, 221 AD3d 500 [1st Dept 2023]). The Court even noted that building staff (the staff of the same building that commenced the guardianship proceeding) impeded the agent’s efforts to repair Ms. Kohler’s apartment. So the First Department reversed and reinstated Ms. Kohler’s advanced directives. The Court found it significant that the AIP “unequivocally expressed her wishes to have [the agent] care for her.” Indeed, MHL § 81.19(c) requires the Court to appoint a person nominated by the AIP unless the Court “determines such appointment is not appropriate” (MHL § 81.19[c]; see Matter of Audrey D., 48 AD3d 806 [2d Dept 2008]).Continue Reading Abuse of Powers of Attorney

Powers of attorney and trust instruments have each been the subject of many an estate plan. They each have also been the subject of multiple estate litigations. In combination, the two have served as fodder for controversies surrounding the agent’s authority over the trust and its terms. Two decisions — Matter of Goetz and Matter of Perosi v. LiGreci — have addressed the issue, albeit with different results. Both decisions provide valuable instruction for drafters and litigators. Ilene Cooper discusses these cases in our latest entry.
Continue Reading Lessons to be Learned From the Power of Attorney

In Matter of Conklin, 2015 NY Slip Op 25094 (Sur Ct, Nassau County 2015), the Nassau County Surrogate’s Court addressed, among other things, whether specifically bequeathed property sold by an attorney-in-fact prior to the decedent’s death, adeemed. The decedent’s will had specifically devised the subject property to his two children and first wife, with a direction that it be sold after his death and the proceeds divided among the three of them. But a sale prior to death meant that the proceeds would become part of the decedent’s residuary estate, of which one of his attorneys-in-fact was the sole beneficiary. Jaclene D’Agostino discusses the case in our latest entry.
Continue Reading Ademption Results from Attorney-in-Fact’s Sale of Specifically Bequeathed Asset