Wednesday, September 13, 2017
Article on Note: Nursing Home Abuse of Agents: Creditor Misuse of New York's Revised Durable Power of Attorney
William P. Davies recently published an Article entitled, Note: Nursing Home Abuse of Agents: Creditor Misuse of New York's Revised Durable Power of Attorney, 79 Alb. L. Rev. 1433 (2015/2016). Provided below is an abstract of the Article:
According to the Third Restatement of Agency, “[a] written instrument may make an agent’s actual authority effective upon a principal’s loss of capacity, or confer it irrevocably regardless of such loss.” A commonly used device that confers agency, and does not terminate upon incapacity, is known as a Durable Power of Attorney (“DPOA”). While such a device can be useful to avoid government and court involvement in the event of incapacity, it can also be dangerous. Without proper safeguards, the agent under a DPOA can use the device to exploit an elderly principal. Due to the danger of abuse of the principal at the hands of the agent, state legislatures have enacted various measures to protect principals. However, as this paper sets out, some reforms that combat DPOA abuse may be contrary to the purpose of the device. One of these reforms is the Special Proceeding available to third parties pursuant to the New York General Obligations Law section 5-1510(3), which in its current form allows creditors to bypass the protections offered by New York Debtor Creditor law.
In order to understand how the special proceeding came to be in its current form, this paper will discuss the history of the DPOA on a national scale, its application in New York, and the various measures taken by New York and other states to ensure agents do not abuse the power granted to them by principals who are no longer competent to manage their affairs.