Last week we were talking about the importance of a well drafted power of attorney or looking at it from the flipside, the problems caused by an inartfully drafted one.
Two recent examples in our office highlight the dangers. In the first case, we drafted the client’s power of attorney. It contains language permitting the agent “to enter any safe deposit box or vault on which [the principal is] a signer and withdraw or add to its contents”. The agent wanted to close the account and surrender the box.
The bank employee reading the clause concluded that this power did not include the ability to close out the box (although she agreed the agent could close the bank account). This is a situation I have come across frequently, an evaluation of the document limited to the express language, rather than examining the document as a whole. Courts have reasoned that the whole document must be examined. Each clause should be used to interpret the others.
If the agent has the power to remove and add contents to the safe deposit box then he has the power to “deal with” the box. He has an implied power to open and close the box. I could have had relied in this argument with the bank, however, I had another paragraph in the document that permitted the agent to conduct any banking transaction authorized by a specifically referenced New Jersey statute. I pointed out to the bank employee the specific language in that law authorizing the agent to open and closed safe deposit boxes. Problem solved.
The second case involved a health care power of attorney not drafted by our office. Son has the ability to make medical decisions for Mom once she becomes incapacitated. Mom has dementia and is paranoid. She wants to leave the assisted living facility in which she currently resides. Son wants to keep her there.
The problem is that the power of attorney does not give him the ability to make decisions about his mother’s residential or institutional decisions. The facility is reluctant to take direction from him without it, especially since Mom is insisting that she has the right to leave. The son will likely need to file a guardianship action to have a court deem his mother incapacitated and appoint him guardian, a time consuming, expensive and intrusive process that could have been avoided with a better drafted power of attorney.
In my 25 years in private practice, I have had numerous instances in which third parties – usually financial institutions – question the language in our documents. As a result, we are constantly updating them. The take away here it to make sure you have a detailed, well drafted power of attorney. Don’t opt for the 2 page one printed off the internet. It could be one of the most costly mistakes you ever make.