Can I Abandon Property of the Principal if I Am the Agent?

Full Question:

My brother has been assigned as the Care Taker Child because he was caring for our mother since 2006. This was to protect our mother's coop. My mother has been living in Medicaid facilities since this Care Taker Child exemption was submitted in 2009. She has been declared disabled by SSI and all monies goes to the Medicaid Facility where she currently resides. She owns no other assets. However, I (the daughter) have been paying the mortgage, maintenance and all other bills because my brother (the Care Taker Child) has substance abuse issues and cannot work. He has also left the coop about 1 year ago, basically sticking me with all the bills. I do not know where he is. I am not on the co-op UCC filings, nor the first or second mortgage. I am in a position where I have to move. Do I just walk away? Is there a medicaid form that needs to be filed? Will any of these actions adversely effect my mother's medicaid status? I know this is not my mortgage, but I do have Power of Attorney and I wish to exit without adverse effects.It also states on the Care Taker Child agreement that if my brother is unable to fulfill the obligations than I become the Care Taker Child. I basically want to leave without any blow-back. Since I cannot buy, sell nor rent this coop. How do I do this?
06/15/2011   |   Category: Fiduciary Duty   |   State: New York   |   #25033

Answer:

Generally, the eligibility for medicaid is determined at the time of application. Therefore, the value of the property should already have been taken into consideration when the mother was admitted to the nursing home. If you walk away from the property, it may be foreclosed upon and the difference between the sale price at foreclosure and the amount owed may be pursued against the mother's estate. The agent is expected to always act in the best interest of the principal and avoid any potential conflicts of interest with the principal.

It will be a matter of subjective determination for the court to determine whether there was a breach of fiduciary duty, based on all the facts and circumstances involved. The standards of care are measured against the subjective interpretation of how a "reasonable" person would act in similar circumstances.

The elements of a cause of action for breach of fiduciary duty are:

(1) Plaintiff and Defendant share a relationship whereby:

(a) Plaintiff reposes trust and confidence in Defendant, and

(b) Defendant undertakes such trust and assumes a duty to advise, counsel and/or
protect Plaintiff;

(2) Defendant breaches its duties to Plaintiff; and

(3) Plaintiff suffers damages.

The elements of a claim for breach of fiduciary duty are not fixed as the claim may arise from virtually any case where one party accepts the trust and assumes the duty to protect a weaker party.

Affirmative defenses to a claim for breach of fiduciary duty can include, but are not limited to:

(1) The passing of the statute of limitations for filing the claim.

(2) Lack of fiduciary relationship (for example, when the parties did not enter a fiduciary relationship, but rather conducted business in an arm’s length transaction there is no duty to protect the other party or disclose facts which the other party could have discovered by its own diligence.)

(3) Lack of standing

(4) Approval (for example, if the alleged actions followed full disclosure to and the consent of the Plaintiff)

(5) Business judgment rule (ex. that the corporate fiduciary's actions were motivated by a bona fide interest in the well being of the corporation where shareholders are the ones owed the fiduciary duty)