Jessie M. Anderson, who suffered from mild dementia at the time, gave her son Lloyd a power of attorney so that he could handle her financial affairs. A year later, Lloyd Anderson transferred all of his mother’s cash, stocks and real estate into his name alone. A year after those transfers Mrs. Anderson died; her daughter Laverne Marszal sued Lloyd Anderson to recover their mother’s property.

Mrs. Anderson’s power of attorney did not specifically give her son authority to make gifts of her property. Under New York law (Mrs. Anderson, her son and her property were all in New York) that meant that there was a presumption that Lloyd Anderson’s transfers were improper—especially since they benefited him personally. That, in turn, meant that Lloyd Anderson would have to clearly show that his mother actually intended to approve the gifts.

Ms. Marszal insisted that the gifts had been made solely to protect Mrs. Anderson’s property from having to pay for her nursing home expenses. Lloyd Anderson told a different story: he insisted that their mother was angry with Ms. Marszal, did not trust her, and expressed her wish to leave her entire estate to him. A psychiatrist who evaluated Mrs. Anderson shortly before her death even testified that she felt threatened by her daughter.

The Appellate Division of the New York Supreme Court ruled that Mr. Anderson had failed to demonstrate the "clearest showing of intent" required to uphold the transfers. It ordered him to return all the property to his mother’s estate, from which it will be distributed equally between him and his sister. Marszal v. Anderson, July 15, 2004

Why did Ms. Marszal do nothing about the transfers until after her mother’s death? If Mrs. Anderson had lived another two years, the federal/state Medicaid program would probably have begun paying for her care, and Ms. Marszal may have felt more at risk from the nursing home costs than from her brother.

Though Arizona law would have applied different reasoning, it probably would have reached the same result. Arizona completely prohibits gifts made by the holder of a power of attorney to himself or herself—unless the document includes specific language and those provisions have been separately initialed by the signer and witness.

There is one way in which Arizona might actually have been harder on Mr. Anderson than New York law. If transfers like those made by Mr. Anderson in his mother’s name were found to be exploitation of Mrs. Anderson, one choice facing the court would have been to disinherit Mr. Anderson, so that he might not have received anything from his mother’s estate—if she had lived in Arizona. As it ended up, he will still receive half her estate.

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