Dementia, Competency & Power of Attorney
Question: “My mother is 91 years old and has Dementia/Alzheimer’s. She does not know how to read or write, but recently she apparently granted Power of Attorney for her finances to my elder sibling. This was done in secrecy and did not take the rest of the family into consideration. Now my sibling has taken over my mother’s house and her bank funds and has placed my mother in a nursing home where she is kept overmedicated. I am concerned about how something like this could have happened. Is there anything I and the rest of my family can do now to have this Legal Directive reversed?”
Henry C. Weatherby’s 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 “conservator.” Among the downsides to a conservatorship, there may be tedious reporting requirements put on the conservator and the costs of court proceedings must be borne by the assets and income of the “ward,” 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 conservator 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.
Henry C. Weatherby, Esq., CLU, ChFC, CEBS
Bloomfield, Connecticut 06002
Scott A. Makuakane’s Answer: This is a heart-wrenching scenario that is played out in countless families every day across America. There is a legal approach to the problem that could be expensive, could worsen your current family dynamics, and could take longer than your 91-year-old mother has left. It would involve securing medical opinions concerning your mother’s current capacity to sign legal documents (and, as precisely as they can tell you, when she lost legal capacity), appointment of a legal representative for your mother, and unwinding the asset transfers and other things your sibling has done. The term used for the legal representative may be guardian or it may be conservator, depending on where you live. You will need an experienced attorney in your State to guide you through the process and represent you in court.
Before you go down that road, consider bringing all of your siblings and other interested family members together to talk about what has been done and why. The answers to those questions may surprise you. More importantly, the family may find a way to move forward in a unified manner that meets your mother’s needs and at the same time preserves (or mends) family harmony. You may find that a trained mediator can help your family members explain their positions and understand each other’s positions. The mediator could be a pastor, a counselor, a lawyer, or a trusted family member or friend who may or may not fit into any of those categories. If no one comes to mind, there may be a Neighborhood Justice Center or similar service in your area that can provide mediation services. This is an alternative worth exploring, and, if it is unsuccessful, it will not prevent you from pursuing the kind of legal approach outlined above.
Scott A. Makuakane, Esq., CFP
Est8Planning Counsel LLLC
Honolulu, Hawaii 96813