Mike, age 56, was upset. He had just gotten off the telephone with the realtor who was handling the sale of his parents’ home. The realtor told him the title company refused to accept the power of attorney that Mike had gotten for his father, Robert. Now the realtor was saying that Robert had to attend the closing himself and sign the home sale documents in order for the sale to be complete.
Mike thought that would be impossible. Robert, age 85, suffers from dementia and wasn’t really aware of what was going on and did not sign his name well anymore. Since Robert had first been diagnosed with dementia a few years ago, Mike and his mother, Shirley had witnessed the steady decline in Robert’s mind and abilities. At first he just had trouble remembering names and would get confused when he was driving. Then his personality seemed to change. Robert had always been outgoing and friendly, but he gradually became mostly silent. While he would respond in short sentences when spoken to, he rarely initiated a conversation. Shirley started paying all the bills since Robert no longer kept track of that anymore. Then Shirley and Mike noticed that though Robert’s long-term memory was good, his short-term memory was bad. He would forget what day it was and could not remember what he had for breakfast. At that point, he was diagnosed with dementia and the family doctor gave him a prescription for Aricept. As his dementia progressed, even his long-term memory became bad and then Robert started wandering the house at night and then would sleep most of the day. He did not speak much anymore, even when the family prompted him. Shirley knew that Robert still recognized her, but he did not seem to recognize Mike and other family members. He would eat the meals she prepared for him, but he had become incontinent and needed help getting to the bathroom, changing his clothes, and Robert needed help in the shower.
Shirley, who is age 83, was worn out. Robert’s nighttime wandering was disturbing her sleep and she was having more trouble helping Robert get out of chairs and bed. Then when Shirley was walking Robert out to the car to go to a doctor's appointment, he slipped and they both fell. It could have been worse in that Shirley did not break any bones, but she was bruised and in pain and worried about both of them falling again. Shirley thought that it would be a real disaster if she had broken her hip. Then she may have been in a rehab facility for weeks and then who would care for Robert?
Shirley decided it was time to sell the family home in Rochester Hills and move to a senior living facility where she and Robert could be together and where there would be elder care help to handle Robert’s care. Mike agreed that was a good idea and found a realtor to list the house. After the house had been on the market for 5 months, they finally got an offer that was acceptable to Shirley. The realtor told Mike and Shirley that since Robert and Shirley were on the deed to the home, they owned their home as husband and wife and both of them would need to attend the closing at the title company to complete the sale of the property. Mike told the realtor that Robert could not come to the closing due to his health. The realtor told him to get a power of attorney so that Mike could sign all the documents on Robert’s behalf.
Mike got on the internet and downloaded a power of attorney form from the Legal Whirl website that he had heard about. Mike had heard Legal Whirl’s ads on the radio and their website since the power of attorney was good for Michigan. Mike answered all the questions online, appointing himself as power of attorney for Robert. When he was done answering questions, he paid $35 for the power of attorney and then another $20 so the form would be processed that day.
Mike took the power of attorney to Robert and Shirley’s new apartment at their senior residence. Legal Whirl’s instructions said it had to be notarized and witnessed, so Mike arranged for a notary public to meet him there along with his brother-in-law, Rick to act as a witness. Mike put the power of attorney in front of Robert, gave him a pen, and asked him to sign it. Robert sort of just stared at the pen, and Shirley and Mike tried to coax him to sign his name. Robert did not refuse, but he dropped the pen and just sort of looked around the room. The notary public said that even if Robert signed the power of attorney, she was not comfortable notarizing it because Robert did not seem to be of sound mind. Rick got mad and said “can’t you just do it” and “don’t you see that were just trying to help Robert and Shirley out.” The notary still refused but told Mike and Rick that Michigan’s power of attorney law allowed for it to just be witnessed, so she did not actually have to notarize it for the form to “be legal.” The notary left and Mike and Shirley tried to coax Robert into singing it again. This time he started writing his first name but then his signature just ended in a scrawl that went below the signature line and looked like a light scribble. Mike said that would have to be good enough and he and Rick signed their names as witnesses. The realtor had said that the title company would need the power of attorney, so Mike faxed it to her.
The day before Mike and Shirley were set to go to the closing to complete the sale is when Mike got the call from the realtor that the title company had rejected the power of attorney. The title company was worried that Robert’s scrawl for a signature indicated he was ill. Also, the title company said that Michigan law prevented Mike from acting as a witness to the power of attorney since he was appointed as agent in the document. That’s when the realtor said Robert would have to come to the closing to sign his name. After thinking about it, Mike called the realtor back and told her that Robert could not come to the closing or sign his name any better due to his dementia. The realtor said you better call an attorney to see if the attorney can make a legal power of attorney form that the title company would accept.
Mike was annoyed. The reason he went on Legal Whirl was to avoid paying an attorney. His parents really needed the money from the sale of their home to pay for their rent and care expenses at the senior facility, so Mike reluctantly called an elder law attorney.
After explaining the situation to the attorney, the attorney said that Robert would not be able to sign a power of attorney. The reason was that, due to his dementia, Robert lacked the “legal capacity” to make a power of attorney or any other legal instrument, such as a deed or Last Will and Testament. Mike asked what do you mean by “legal capacity?” The attorney explained that in order to create a legal power of attorney, one must have the mental competence to reasonably understand the nature and effect of his actions. That is what is meant by legally capacity; in a nutshell, the person signing the power of attorney must know what is going on and what they are doing. Here, it was unclear if Robert even recognized his family anymore, so it is clear that Robert did not understand that he was signing a document that would allow Mike to sell his home.
Mike said and “I know that his signature isn’t very good, but isn’t the fact that he put his mark on the document good enough?” The attorney answered that Michigan’s power of attorney law actually does not require that Robert sign the document, just that he have the mental capacity to know what he is doing. If Robert was just physically unable to sign, but if he still had his mind, he could direct the notary public to sign the document on his behalf. While the quality of his signature makes Mike’s Legal Whirl form suspect, it is the fact that Robert does not know what he is doing that is actually the problem.
Mike said “this mental capacity rule just sounds like something a lawyer made up to make things more complicated and expensive.” The attorney answered that one of the fundamental principles of American law is that once we turn age 18, we are legal adults and we are entitled to make all our own personal, medical, financial and legal decisions; nobody else can make those decisions for us, including a relative or the government. That is a wonderful freedom to have and is a benefit and not a problem, until one cannot make good decisions for themself due to illness. Then, if one is ill or incapacitated to the extent that he or she is not able to effectively manage his or her property and business affairs, Michigan law considers that to be a situation where an incapacitated adult needs protection so that his or her rights are protected.
Mike said, “but I am his son and my mother, Robert’s wife is ok with this. They need the money to pay for the senior facility.” The attorney said he could understand Mike’s frustration, but asked Mike if he would want someone to be able to sell his home or take money out of his bank account without his knowledge or consent?” Mike said that if he were in Robert’s situation, he would want his wife and daughter to be able to make these decisions for him and to sign his name. Then he said “since everyone knows this is in Robert’s best interest, the Legal Whirl form should be good enough.”
The attorney said the law provides a straightforward solution for people to avoid the incapacity problem in that the law says a mentally competent adult can designate a person of their choice to be their agent or attorney-in-fact to make financial, legal, and other decisions for them under a valid Michigan power of attorney. However, it is a legal instrument that has to be created when the person is of sound mind.
The attorney continued and said “your father did not create and sign a power of attorney before he got dementia, so that might mean that he did not want you to make decisions for him. More likely, Robert was just like many people: he did not know it would be a problem or even if he knew he should have legal instruments in place in case he got incapacitated, he procrastinated and never got around to it.”
Mike said if Robert could not make a power of attorney now and could not sign his name to the deed, how will they sell the house. The attorney answered that this is such a common problem the law provides another solution. That will be the subject of my next post.
Andrew Byers is an Elder Law Attorney in the Rochester Hills area or Oakland County, Michigan who advises older people and their families on Michigan powers of attorney.