Legal Q&A: Competency To Execute Legal Documents

Question: "My father is 95 years old and has Dementia/Alzheimer's. He cannot read or write, but recently granted Power of Attorney for his finances to my older brother. This was done in secrecy and did not take the rest of the family into consideration. Now my brother has taken over my father's assets and has placed my him in a nursing home. Is there anything I and the rest of my family can do now to have this Legal Directive reversed?"

Answer: Your family is clearly in a difficult situation. There are several ways to attack this problematic situation, but neither way will be quick and easy, and there is no way to deal with the situation without involving your local probate court.

Your question seems to suggest your mother may not have been fully mentally competent when she executed the Power of Attorney. If so, the grant of authority was not legally valid. Unfortunately, her bank will not likely take action simply on the word of you or your other family members alone. Rather, you will need to petition the probate court to consider the facts and circumstances and ask that the court renders a judicial decision to that effect. A bank or the holders of other assets will not likely simply take the word of you or your family members that your mother could not have validly give the authority to your elder sibling, but a bank would have to respect the legal opinion of the probate court. The bank would then have to remove your elder sibling's authority over your mother's assets.

Another approach to take would be to concede the Power of Attorney was valid but to demonstrate that your elder sibling is now breaching his or her fiduciary duties and should be formally removed by the probate court.

In either of the above situations, the probate court would likely seek to formally appoint someone to look after your mother's personal and/or financial self-interest. When a court makes such an appointment, the appointee is known as a "Guardianship." Among the downsides to a guardianship, there may be tedious reporting requirements put on the guardian and the costs of court proceedings must be borne by the assets and income of the "guardian," the person for whom the conservator has been appointed. On the plus side, since the activities of conservators are under the ongoing oversight of the probate court, banks will readily accept the authority of a court-appointed guardian whereas it may take more convincing to persuade a bank to honor the authority of an agent appointed privately under a durable power of attorney.

Your predicament illustrates the wisdom of getting one's estate planning arrangements in order long before there are physical or cognitive health issues. Instead of a document being placed in front of a vulnerable family elderly parent in secret, the process of documenting and formalizing a parent's wishes can be done in a way that leaves little question about who the parent would like to act for them and what their instructions are to the family members they have named. The plan can and should include the sort of "checks and balances" to make sure no individual appointee can act in their own self-interest, at odds with the wishes of the parent.

If you have additional questions, you may want to talk with an attorney at Michael Hodes, LLC (410) 769-8002 about this matter.

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Above content provided by Michael Hodes, LLC. For advice about legal issues, consult a licensed Attorney.