Wills, Trust & Estate Assign 2
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Re: what can a person do under the power of attorney in terms of gift transfers
Relevant Facts
Our client Mark Down had our firm do a will for him several years ago that gives all of his assets to his children (his wife died previously). He also executed a power of attorney, giving his son, Slowe, the power to handle all of his financial assets. Slowe called and told me that old Mark's health is starting to deteriorate and although he's still healthy, Slowe is worried that Mark may need Medicaid assistance sometime in the future. Therefore, he wants to try to remove Mark's assets (which consist mainly of a $300,000 brokerage account) from his name and give his assets to his children. Slowe told me that Mark is losing competency and really doesn't want to deal with any financial matters any more. So, I think we ought to tell Slowe to transfer Mark's assets to Mark's children under his power of attorney. Sure, we're looking at a 5 year period of ineligibility for long term care Medicaid, but Mark's ineligible now anyway. However, one thing is bothering me: I heard that a recent case here in New York, Matter of Ferrara, 2006 N.Y. LEXIS 1759; 2006 NY Slip Op 5156, put some kind of limit on what a person can do under a power of attorney in terms of gift transfers, what impact will this case have on the Down case?
Applicable Law
In Matter of Ferrara, 7 N.Y. 3d 244 (N.Y. 2006), The Principle, Mr. George Ferrara had a will that stated all assets were to go charity and the family was not to receive anything, his health faded and he signed a durable power of attorney naming both his brother and nephew as the attorney in fact. NY Gen Oblig Law 5-1501 (1) (M) permitted an attorney in fact to give gifts to family members not exceeding $10,000 to each person in any year. The form executed by Mr. Ferrara removed the $10,000; the nephew transferred $820,000 of assets to self. The short form was expanded under NY Gen Oblig Law 5-1503 to remove
To:
Date:
Re: what can a person do under the power of attorney in terms of gift transfers
Relevant Facts
Our client Mark Down had our firm do a will for him several years ago that gives all of his assets to his children (his wife died previously). He also executed a power of attorney, giving his son, Slowe, the power to handle all of his financial assets. Slowe called and told me that old Mark's health is starting to deteriorate and although he's still healthy, Slowe is worried that Mark may need Medicaid assistance sometime in the future. Therefore, he wants to try to remove Mark's assets (which consist mainly of a $300,000 brokerage account) from his name and give his assets to his children. Slowe told me that Mark is losing competency and really doesn't want to deal with any financial matters any more. So, I think we ought to tell Slowe to transfer Mark's assets to Mark's children under his power of attorney. Sure, we're looking at a 5 year period of ineligibility for long term care Medicaid, but Mark's ineligible now anyway. However, one thing is bothering me: I heard that a recent case here in New York, Matter of Ferrara, 2006 N.Y. LEXIS 1759; 2006 NY Slip Op 5156, put some kind of limit on what a person can do under a power of attorney in terms of gift transfers, what impact will this case have on the Down case?
Applicable Law
In Matter of Ferrara, 7 N.Y. 3d 244 (N.Y. 2006), The Principle, Mr. George Ferrara had a will that stated all assets were to go charity and the family was not to receive anything, his health faded and he signed a durable power of attorney naming both his brother and nephew as the attorney in fact. NY Gen Oblig Law 5-1501 (1) (M) permitted an attorney in fact to give gifts to family members not exceeding $10,000 to each person in any year. The form executed by Mr. Ferrara removed the $10,000; the nephew transferred $820,000 of assets to self. The short form was expanded under NY Gen Oblig Law 5-1503 to remove