The Importance Of a Power Of Attorney: A Story
Recently I met with a divorcée about updating her will. After discussing the will, I asked her if she had a power of attorney (POA). She answered no, so I explained the benefits of having a POA. She said her father had urged her to update her will and told her she did not need a POA since he and her mother had never needed one. This reminded me of a situation in which I became involved a number of years ago, which I share with you below (all names are fictional).
One day a realtor acquaintance, Bert, called me from the home of an elderly couple, Hank and Martha Smith, who had contacted him about selling their house to move into a nearby senior living facility. They needed the money from their house to afford that. During the meeting, Bert realized Martha did not understand the conversation. When he had a chance to pull Hank aside, he asked him if Martha was capable of signing a listing contract. Hank admitted Martha had Alzheimer’s disease, but he assumed he could sign everything for both of them since he had no trouble signing his name on checks for their joint checking account and the house was in joint names. Bert explained to Hank that he could not sign documents on Martha’s behalf to sell their house without a POA.
Hank sighed and said, "We’ve been married for 60 years and have never lived apart, but Martha needs specialized care soon. I can’t take care of her myself, as much as I want to do so. We need to sell our home, so we can stay together and she can get the care she needs."
Bert wanted to help this nice couple sell their house and knew they needed legal help so he called me from their house. After explaining the situation to me, Bert put Hank on the phone. I told Hank I could help them so he made an appointment.
When we met, Hank asked me if I could prepare a POA for this wife to sign. I explained in order for a POA to be valid, a person must have the mental capacity to fully understand what it means to grant someone the power to sign legal documents for her, including those needed to sell her property. This is known as being legally competent. A person who is not legally competent cannot make a valid power of attorney, and it is ethically improper for an attorney to knowingly facilitate this.
I told Hank about the several instances in the past when I declined to prepare POAs because I believed the person did not have the necessary mental capacity, but if Hank believed Martha was competent, he could ask her doctor to write a letter stating this and then I could prepare the POA. Hank said that he knew Martha's mind was too confused to understand things. He then asked me to tell him more about becoming Martha’s guardian.
I explained, "To be appointed guardian for Martha, you will have to obtain a special written report from Martha’s doctor describing the nature and extent of her mental incapacity. Typically, doctors charge $200-$500 to do this. I will provide the doctor with all of the questions he will need to answer. Then I will then prepare a petition to the county orphans’ court using that report and the facts you provide to request that the court appoint you as both guardian of the person and the estate of Martha."
Furthermore, I continued, "the court process will take at least several months, and you will have to appear in court with me and testify why you believe Martha needs a guardian and you are the right person to be appointed. With the doctor’s report and your testimony, I believe the court will appoint you her guardian, and then you can make decisions about her personal care and her money and sign documents for her."
Hank just shook his head; he never had to go to court before. It would be difficult but he would do it for Martha. Then I told Hank one of the hardest tasks; Martha would have to appear in court to be questioned by the judge, unless her doctor could state in his report that this would be harmful to her. Hank immediately stiffened and said there is no way he would put Martha through that. I explained to Hank that if Martha is suffering from advanced Alzheimer’s disease, it was very likely her doctor would not want her to appear in court and would indicate this in his report.
Finally, we discussed my fees and court costs, which would be between $2,500 and $3,500, depending on how much time I would spend communicating with Martha's doctor. Hank looked at me and said, "That’s about a half month’s rent at our new home."
By the time we were done, Hank looked exhausted, but he was determined to do what was necessary so he and Martha could stay together.
I got to work and things started out well. Martha’s doctor was very cooperative and prepared the report in only a week. He was very firm in his opinion that attending a court hearing would be harmful to Martha’s mental health. The petition was filed and a court date set. In the meantime, Bert convinced his broker they should trust Hank and begin working on selling the house with only Hank’s signature on the listing contract. Everyone knew if Bert was lucky enough to find a buyer before we got to court, signing an agreement of sale would have to wait until Hank was appointed Martha’s guardian. Hank and Martha’s luck continued. A buyer was found who was very sympathetic to the situation and was willing to sign an agreement with Hank and then wait until Hank was appointed guardian to finalize things.
On the day of the hearing, Hank rode to the courthouse with me. Martha’s doctor had written what was needed so that Martha did not have to attend the hearing. After we exchanged some small talk, Hank, with a worried look on his face said, "I am nervous about the hearing. What if the judge does not appoint me guardian today? What then?" I tried to reassure him, "Hank, I am confident the judge will see that appointing you as Martha’s guardian is the best thing for her and you."
Our conversation drifted toward Hank’s fond memories of his life with Martha. "Martha has always been a thoughtful person, loving wife and devoted mother to our three children. She left most financial decisions up to me. A few years ago, when Martha was still well, we talked about having powers of attorney prepared, but a friend said it wasn’t necessary. I should have never listened to him. He has opinions about everything, and is wrong more often than right," he told me. "Now" he said, "ever since Martha was diagnosed with Alzheimer’s, her really good days are fewer and further apart. She still knows me and the children, but her memories of our marriage are patchy and she doesn’t smile as much anymore." Our conversation is one I won’t forget for a long time.
Once in court, having to testify was not easy for Hank, but all went well and the judge was sympathetic. Just over three months after we started the process, Hank was now legally Martha’s guardian and would finalize the sale of the house.
As we left the courthouse Hank gave a relieved sigh and said, "The past few months have been rough. I have been so worried how this would turn out and I’ve been kicking myself for letting things come to this. It’s been hard on our kids too, worrying about court. But, at least, it’s over. And you can bet I’m going to tell everyone who will listen how important it is to have a power of attorney."