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Today's Law: New Power of Attorney Statute and Fault in Equitable Distribution
May 15, 2009
by Forsyth & Forsyth TODAY'S LAW
Newsletter for clients of Forsyth & Forsyth May 15, 2009 No 89
NEW POWER OF ATTORNEY STATUTE
In January the New York Legislature updated the law on powers of attorney. It created a longer form and spelled out the rights and responsibilities of the person holding the power. The law takes effect September 1. Look for more information about the changes in the next newsletter.
One word of advice now. If you have a power of attorney, you do not have to sign a new one after September 1. The law states that a third party must honor your power of attorney, whenever signed, so long as the power complied with the law then in effect.
CONSTRUING LANGUAGE
Two recent cases demonstrate the importance of the words chosen in a contract or a will.
In the first case a developer signed a purchase contract contingent on the developer obtaining town approval to construct “residential condominium units” on the property. The town approved the construction of seven “townhouses,” “with ownership (of certain common areas) by a Homeowners Association.” The town forbade ownership “as a condominium or cooperative development.”
The developer wanted its deposit back, asserting that it wanted to build condominiums. Condominium has a legal meaning and describes air space. The seller countered that the seller used the phrase in its generic sense, to describe attached housing units. The court sided with the developer.
In the second case a person created four trusts in 1957 and 1964. He named as trustees a bank and a member of the large New York City law firm that drafted the trusts. If an individual trustee died, the bank was to appoint as successor “such member of the firm” “as may be designated by said firm as most familiar with the affairs of the Grantor.”
In the 1970's the Grantor took his business to another large New York City law firm. The grantor died and then the individual trustee died. The original law firm tried to designate a successor trustee but the beneficiaries objected.
The beneficiaries argued that a new trustee had to be familiar with the grantor’s personal affairs to qualify. Knowledge of the trusts’ investments ($250 million) and operations was not enough. The law firm had to retain the confidence of the grantor. His switch showed a loss of confidence. Therefore, none of the members of the original firm qualified.
The original law firm and the court saw the situation otherwise. The affairs of the grantor included the operation of the trusts. In fact, after the grantor’s death the operations would become his sole active affair.
The original firm had the confidence of the grantor when he created the trusts, which was all that mattered. To qualify as a successor trustee, a person need only be a member of the firm. From this pool of eligible persons the firm would select the member “most familiar” with the trusts.
FAULT IN EQUITABLE DISTRIBUTION
In equitably distributing the property of a couple going through a divorce, a court may consider a host of factors. None of them mention marital fault, which is a departure from the previous law. Yet, fault can still enter the determination through the catchall “any other factor” that may be “just and proper.”
To be considered, the misconduct of a spouse must be “so egregious or uncivilized as to bespeak a blatant disregard of the marital relationship.” Courts rarely find such misconduct. When they do, it involves severe assault and battery, rape or the kidnapping of children. Adultery, alcoholism, abandonment, verbal harassment with several acts of minor domestic violence, and lying about wanting to have children do not constitute misconduct.
A recent case illustrates the reluctance of courts to delve into the dirt of divorces.
A wife had an affair and became pregnant. She did not tell her husband about the affair. He bonded to the boy born and supported him for more than four years. Many jokes about the lack of a physical resemblance allegedly led him to obtain a DNA test. When it came back negative, he sued for divorce. The wife conceded the affair but claimed to be surprised about the parentage of the boy. The husband countered that she knew or should have known.
The husband charged that his wife had harmed his emotional health, a factor that the court should consider in distributing a greater share of the marital property to him. He wanted his wife to reimburse him for the support paid. If he had known about the affair sooner, he would have moved quicker to hold the biological father responsible. Finally, he sought punitive damages.
While the court did not condone the alleged behavior of the wife, it dismissed most of the husband’s atypical monetary claims. Fault was irrelevant because the wife did not “endanger the lives or physical well-being of family members.” The husband may recover expenses that flow directly from her fraud, such as the fee paid a mediator. However, the nexus between the fraud and the support payments is “too remote.” Punitive damages are inappropriate because the infidelity and alleged concealment of the true father did not “imply a criminal indifference to civil obligations.”
The court did not say so but the interests of the boy are advanced by avoiding the dirt. Hopefully the bond between the boy and the husband remains strong, in spite of his allegations.
WHERE ARE THE KIDS?
For the first time in many years two of Scott’s and George’s children are living in the same city–Washington. Tyler, George’s son, is finishing his second year at the Federal Aviation Administration, working as a cartographer. Yes, we still have mapmakers and that is what the government calls them. Caitlin, Scott’s daughter, parlayed her fundraising work on the Dan Maffei for Congress campaign into a job as a deputy finance director for Joseph Courtney, a Congressman from eastern Connecticut. They both like life in D.C. and expect to socialize together a bit.
Tory, George’s daughter, graduated from the University of Massachusetts and landed a job as a nurse in Burlington, Vermont.
If you have any questions about powers of attorney, the text of contracts, equitable distribution or any other matter, please contact us.
FORSYTH & FORSYTH
16 W. Main Street, Suite 110
Rochester, NY 14614
(585) 262-3400
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