Many people ask whether the oldest child has a power of attorney. Just because a person is the oldest child doesn’t mean the oldest child automatically has a power of attorney. A power of attorney must be granted by one person in favor of another in a written document and executed with all the formalities required by state law. For the oldest child to have a power of attorney, the parent must have executed a written power of attorney appointing the child as the parent’s attorney-in-fact to perform certain acts.
The two types of powers of attorney
There are two types of powers of attorney that are usually executed by parents in favor of their children: a medical power of attorney (also called a living will or healthcare proxy) and a financial power of attorney. Both powers of attorneys need to be executed by the principal while they still have the mental capacity. It can also be revoked at any time for as long as the principal has mental capacity.
A medical power of attorney is called a healthcare proxy in New York and is governed by New York Public Health Law Article 29-C. A healthcare proxy is a written document where a principal (usually the parent) authorizes the agent (usually the child) to make any and all healthcare decisions on the principal’s behalf that the principal could make, subject to the express limitations of the proxy. To be valid, the principal has to execute the health care proxy in front of two adult witnesses who shall likewise sign the proxy. This healthcare proxy only becomes effective when the attending physician makes a written determination that the principal lacks the capacity to make health care decisions on his own.
A financial power of attorney in New York, on the other hand, is governed by New York General Obligations Law, Article 5, Title 15. The financial power of attorney is a written document where a principal (usually the parent) gives the agent (usually the child) the authority to spend the principal’s money and sell or dispose of the principal’s property during the principal’s lifetime, subject to the limitations provided in the financial power of attorney. To be valid, the financial power of attorney has to be signed by the principal before a notary public.
Depending on the circumstances of the parents, a financial power of attorney can be springing, durable, or both springing and durable. A springing financial power of attorney gives the agent authority only upon the happening of an event – usually when the principal loses mental capacity. A durable power of attorney gives the agent authority even when the principal loses mental capacity. In most cases, the parent only gives the child authority to act for the parent’s behalf when the parent loses mental capacity (springing durable power of attorney). Sometimes, when the parent lacks the physical capability to perform certain acts, the parent will execute a power of attorney that is already effective even when the parent still has mental capacity.
What happens when there is no power of attorney and a parent loses mental capacity?
When a parent has not executed any power of attorney and subsequently loses mental capacity, the children need to file legal guardianship proceedings in order to manage the property of the parent.
Conflicts among siblings due to power of attorney
Conflicts can arise among children when a parent has appointed one of the children as the parent’s attorney-in-fact. It even becomes more complicated when the child providing care and assistance to the parent is different from the child who has been appointed as attorney-in-fact or agent. There have also been instances of children abusing the financial power of attorney by giving gifts to themselves. To avoid these situations, it is important that a lawyer prepare your power of attorney to ensure that safeguards are provided to prevent or minimize the risk of abuse.
Sibling care arrangements
Another way to prevent disputes among siblings when one child has been appointed as a power of attorney is for the siblings to discuss, communicate, and come into an agreement on important decisions regarding the care of their parent. A sibling care arrangement is not a substitute for a power of attorney because a power of attorney is a grant of authority by the principal to an agent. A sibling care arrangement will complement the power of attorney on the following topics:
- Who will provide the primary care to the parent?
- How are caregiving duties divided among siblings?
- Will a sibling be reimbursed for caring for a parent?
- Should the parent live with a sibling?
- Should the parent live at home with assisted living or in a nursing home?
- How should the parent’s money and property be managed?
- Should the siblings contribute financially to the parent’s care?
- How should the siblings manage the property of the parents to ensure they are Medicaid-eligible and the property will be Medicaid-exempt from estate recovery?
To give this sibling care arrangement more power in enforcement, consequences for breach can be provided, such as a reduction in inheritance through waiver or the loss of appointment in a power of attorney by voluntary resignation.
When the siblings discuss amongst themselves how to deal with these tricky financial issues regarding their parents, they will be able to resolve whatever dispute in an orderly manner without antagonism against each other. An estates attorney will be able to guide you through the process of executing a health care proxy, financial power of attorney, and sibling care arrangement.
The oldest child does not automatically have a power of attorney. A power of attorney is granted in written form and executed in accordance with the formalities of state law. Should you need assistance in drafting a power of attorney or any other arrangement, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 718-509-9774 or send us an email at email@example.com.