A recent court case involving a power of attorney demonstrates the problem with using online estate planning forms instead of hiring an attorney who can make sure your documents are tailored to your needs.
Mercedes Goosley owned a home in Pennsylvania. In 2013, she named one of her six children, Joseph, as her agent under a power of attorney using a boilerplate online power of attorney form that Joseph downloaded from the internet. Unbeknownst to Joseph, the power of attorney required Mercedes to be declared incompetent for Joseph to act as her agent.
Immediate vs Springing Power of Attorney
Powers of attorney can be either immediate or springing. An “immediate” power of attorney takes effect as soon as it is signed; while a “springing” power of attorney only takes effect when the principal becomes incapacitated. The problem is that springing powers of attorney create a hurdle in order for the agent to use the document. When presented with a springing power of attorney, a financial institution will require proof that the incapacity has occurred, often in the form of a letter from a doctor. In this situation, using an online power of attorney form did not allow Joseph to receive the counseling and education he needed to be informed and act in the proper manner for his mother.
In this case, Joseph began acting for Mercedes without getting a declaration of her incompetency. After she moved into a nursing home, Joseph listed her home for sale in 2018 and accepted a purchase offer as agent for his mother under the power of attorney (which was the online power of attorney form). At the time, Joseph’s brother, William, was living in the home, and Joseph instructed William to move out. This resulted in a dispute that ended up in court, with William arguing that Joseph did not have authority to act as his mother’s agent.
A Pennsylvania appeals court eventually determined that Mercedes had intended to execute an immediate power of attorney, as evidenced by the fact that Joseph had held himself out as Mercedes’ agent since 2013 and routinely conducted affairs on her behalf without Mercedes restricting or objecting to his agency.
While the court ultimately ruled in Joseph’s favor, Joseph and Mercedes could have saved time and money by consulting with an attorney before signing the online power of attorney form. An attorney would have been able to explain the difference between an immediate and springing power of attorney and tailor the power of attorney to Mercedes’ needs.
To read the court’s decision in the case Stecker, et al v. v. Goosley, et al (Pa. Super. Ct., No. 1266 EDA 2020, April 15, 2021), click here.
It is extremely important to talk with your attorney before creating any estate planning documents, including power of attorney, which is arguably the most important and powerful estate planning document for many individuals. Consult with the estate planning attorneys at Elville and Associates to make sure you have all the estate planning documents you need. The firm offers free consultations for estate planning clients to understand your situation and goals and create a path forward for your family and you, offering peace of mind along the way. To set your initial consultation, contact Community Relations Director Jeff Stauffer at firstname.lastname@example.org, or by phone at 443-343-8424 x117.