Legal Research Paper for Wills Trusts and Estates

Only available on StudyMode
  • Download(s): 134
  • Published: February 3, 2013
Read full document
Text Preview
     Mark Down, who is 74 years old, made a will leaving all of his assets to his children. He also executed a power of attorney, giving his son, Slowe, permission to handle all of his financial assets. Slowe is now worried that Mark may need Medicaid assistance in the future and wants to remove his assets, from his name, and give them to his children. Under the current law, Mark will be ineligible for Medicaid for a period of 5 years after the gift transfer is made, so it's in Marks best interest to get all of his assets transferred as soon as possible. Because Mark doesn't want to deal with the financial matters himself, the issue is whether or not Slowe can transfer Marks assets under his power of attorney. 

     In the case, Matter of Ferrara, 7 N.Y.3d 244 (N.Y. 2006), George Ferrari made a will in June 1999, leaving all of his property to the Salvation Army. Later that year, as his health began to deteriorate, George called on his brother, John, and Johns son, Dominick, for assistance. George wanted the family members to have control of his property and distribute it however they wanted to. On January 25, 2000, George signed a durable general power of attorney, which appointed John and Dominick, as his attorneys-in-fact. In addition, he signed a typewritten provision allowing John and Dominick to make gifts without limitation in amount, to themselves. Three weeks later, George's health deteriorated and he passed away. During that three week period, Dominick transferred about 820,000 of his uncles assets to himself. 

     Upon learning of George's death, the Salvation Army filed a claim, with the Surrogates court, seeking a turnover of George's assets. Finding that George had been competent and correctly completed the forms prior to his death, the salvation army's case was dismissed. The Salvation Army, then appealed, and the appellate division also dismissed the case. When the case reached the state's highest court, the New York State Court of Appeals disagreed with both the Surrogate court and Appellate division. The court stated that the statute of limitation could be waived, by adding additional language allowing unlimited gifting in the power of attorney form. Otherwise, the $10,000 gift limit, per person, per year must be followed. The court concluded that, in section 5-1502m of the general obligations law, all gifts made pursuant to a power of attorney must be in the best interests of the principal. Therefore, they found that the statute's intent had not been followed by George's relatives in this case, because nothing in section 5-1502m indicates that the best interest requirement is waived when additional language increases the gift amount.

     In another case, Matter of Mildred Keri 811 A.2d 942 (NJ App.Div.2002), a mentally incompetent person, Mildred's son sought approval to engage in Medicaid planning, which included giving much of the proceeds of the sale of her house to her two sons. In 1996, Mildred executed a general power of attorney naming her son, Richard, as her attorney-in-fact. Although it authorized him to apply for Medicaid on her behalf, it did not state that he could make gifts to himself or anyone else. Richard's plan was to sell Mildred's home and put her in a nursing home. He planned to take $98,000 of the proceeds, as a gift to share equally between him and his brother, and leave Mildred $78,000 to pay for her nursing home care, during the ineligible period for Medicaid, which would result from the gift. The judge granted the sale of her home and nursing home placement, but refused to authorize the Medicaid plan. The reason for that was because, the power of attorney form did not include additional language, allowing him to make such large gifts. The power of attorney form did not state anything about gifts at all. The court also stated that while competent, if the principal does not specify a Medicaid plan, then Medicaid planning is not allowed, unless the beneficiary is a needy...
tracking img