A recent legal case with a power of attorney shows the problem with using online estate planning forms rather than hiring an attorney who can make sure your documents are tailored to your needs.
Mercedes Goosley owned a house in Pennsylvania. In 2013, she named one of her six children, Joseph, as her proxy using a form Joseph downloaded from the Internet. Unknown to Joseph, the power of attorney required that Mercedes be declared incompetent in order for Joseph to act as their agent.
Powers of attorney can either be immediate or arise. An “immediate” power of attorney takes effect as soon as it is signed, while a “jumping” power of attorney only takes effect if the client becomes incapable of acting. The problem is that jumping powers are a hurdle for the agent to use the document. When a financial institution receives a jumping power of attorney, it must prove that the incapacity for work has occurred, often in the form of a letter from a doctor.
In this case, Joseph began acting for Mercedes without receiving any explanation of her incompetence. After moving to a nursing home, Joseph put her home up for sale and accepted an offer to buy as his mother’s agent under the Power of Attorney. At the time, Joseph’s brother William was living in the apartment, and Joseph directed William to move out. This led to a dispute that ended in court, with William arguing that Joseph was not authorized to act as his mother’s agent. A Pennsylvania appeals court eventually ruled that Mercedes had intended to execute an immediate power of attorney, as evidenced by the fact that Joseph had excelled as a Mercedes agent since 2013 and had routinely conducted business on their behalf without Mercedes restricting or restricting its agency Objected.
While the court ultimately ruled in Joseph’s favor, Joseph and Mercedes could have saved time and money by consulting an attorney before signing the power of attorney. A lawyer could have explained the difference between an immediate and an emerging power of attorney and tailored the power of attorney to Mercedes’ needs. Talk to your attorney before preparing estate planning documents. To find a lawyer near you, click here.
Click here for the General Court’s decision in Steck et al. Against Goosley et al. (Pa. Super. Ct., No. 1266 EDA 2020, April 15, 2021).
Last change: May 13th, 2021
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