By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Power of Attorney Lawyer

One of the most important positions one can assume is being a guardian or a power of attorney over a person.  The management authority you have over somebody’s finances is a responsibility that cannot be taken lightly.  No matter whether appoint by a court as a guardian, or if voluntarily appointed as a power of attorney, there is the potential to abuse the role you are in.  After all, you have access to a person’s finances. As a fiduciary you have authority to enter into legal obligations, spend their money, and (God forbid) leave a person high and dry with creditors knocking on their door.  But what if your principal ratifies the action you are taking in regards to the account? In other words says; it’s ok? You might be thinking no way.  After all, if this person can do that, why have a guardian/power of attorney in the first place.  But it certainly is possible, and as far as one Supreme Court noted in the case of Estate of Barbara M. Frost the signature by the principal is enough to defeat a claim that a reverse mortgage on the principal’s property when entered into by the power of attorney was fraudulent and unlawful.

In Frost, the decedent named her half-sister, as the sole beneficiary in a will executed in years earlier.  She also had a friend, who managed her rental property, a unit of which served as her residence. At some point, Frost appointed him as her power of attorney, and thereafter, she executed a new will making him the sole beneficiary thoroughly removing her sister from the will completely.  Frost at that point was moved into an assisted living facility.  During that same month, the power of attorney contacted Countrywide Bank to set up a reverse mortgage on Frost’s residence, representing that he was Frost’s son and that Frost continued to live at that residence.  Countrywide approved the mortgage subject to its closing agent approving the POA, and ordered the closing agent to postpone approving the reverse mortgage if it found that Frost owned and occupied another residence besides the one in question.  The agent told Countrywide that Frost was in a rehabilitation facility and could not make it to the loan closing physically, so it was postponed.  Thereafter, another closing agent went to Frost, who signed and initialed each page of the promissory note and deed of trust with regards to the reverse mortgage, along with a document declaring the rental property to be her primary residence.  The paperwork was completed and the agent took out $208,000 of the $250,000 as advances under the reverse mortgage over the next four years prior to Frost’s death.

In our next blog, I will discuss how the court reviewed these documents and how it used the signatures of Frost to come to its conclusion.  Stay tuned.

To discuss your NJ Power of Attorney matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing consultations if you are unable to come to our office.