Power of Attorney

The fact that your aunt has a diagnosis of Alzheimer’s disease, does not necessarily mean that she cannot execute a power of attorney. While it may seem like a decision to be made by her doctor, it is actually the lawyer who will determine if she or he feels your aunt has capacity.

January 20, 2012

Question: My aunt has been diagnosed with Alzheimer’s disease. She is in the early stages, can she sign a power of attorney? Who determines if she has capacity?

Answer: This is an excellent question and one that comes up often in the practice of Elder Law. The fact that your aunt has a diagnosis of Alzheimer’s disease, does not necessarily mean that she cannot execute a power of attorney. While it may seem like a decision to be made by her doctor, it is actually the lawyer who will determine if she or he feels your aunt has capacity. An Elder Law attorney has an ethical obligation to make sure that the client has the requisite ability to hire the attorney and to understand the documents that are being executed. Under New York law the standard for capacity for executing a power of attorney is defined as the “ability to comprehend the nature and consequences of the acts of executing and granting, revoking, amending or modifying a power of attorney, any provision of a power of attorney, or the authority of a person to act as agent under power of attorney.”

This means that your aunt should understand what a power of attorney is and each and every power given under the document. Therefore she must understand that the power of attorney is likely to have powers well beyond the task of collecting her income, assets and payment of bills. An experienced attorney should be capable of making that determination.

A common mistake we see is where a friend or family member obtains a power of attorney from the internet. Often the document doesn’t meet the statutory requisites for a valid power of attorney in New York or doesn’t have the powers that are needed. The principal signs the document without any legal advise and no determination is made as to the person’s capacity. The entire process is suspect especially when the agent is the one who procured the document and arranged the circumstances of execution.

When the principal has already been diagnosed with a disease, the whole transaction can be tainted by the irregularity. It would be far better for the individual to consult with an experienced attorney and allow the attorney to prepare the documents and arrange the signing based upon the attorneys opinion as to capacity and the powers that will be needed. Anything less than that could be a disaster.