Matter of Estate of Maika, 39 N.Y.3d 1137 (April 25, 2023)

A divided Court of Appeals (New York’s highest court) affirmed a divided Appellate Division on the question of whether the transfer of decedent’s residential property to two of his children, pursuant to power of attorney given to five of his children, was compensation for caregiving by the two children, rather than a gift (which would have been beyond the scope of the power of attorney). Matter of Estate of Maika, 39 N.Y.3d 1137 (April 25, 2023).

In 2010, decedent, who suffered from severe disabilities, executed a power of attorney authorizing five of his children to act on his behalf with respect to various transactions, including real estate transactions, if a majority of the appointed children agreed on a transaction. The power of attorney did not authorize making gifts on decedent’s behalf. In March 2017, three of the children (including Philip), acting in their capacities as decedent's attorneys-in-fact, conveyed decedent’s residential property to Philip and one of his siblings as joint tenants, with decedent retaining a life estate in the property. Following decedent's death in July 2017, the administrator of decedent's estate commenced a proceeding alleging that the property had been improperly transferred and should be returned to decedent's estate.

The lower court concluded that the transfer was an improper gift, relying on the presumption that “where parties are related, ... services were rendered in consideration of love and affection, without expectation of payment.” The Appellate Division reversed (with two judges dissenting), finding that respondents had rebutted that presumption with “clear, convincing and satisfactory evidence” that there was an agreement that the services of the two children who received the property “would be compensated” for having been the caregivers for their father for many years prior to his death. The “respondents established that the attorneys-in-fact acted within the authority delegated to them by decedent to transfer real property for his benefit, i.e., as compensation for the services that permitted him to remain in the home in accordance with his expressed wishes.” The Court of Appeals affirmed on the same grounds. 

However, two Court of Appeals judges dissented on the ground that Philip’s status as one of the recipients of the property required a higher showing from respondents: that the decedent himself intended the conveyance and that it was in his best interest. The dissenters would have remanded for further evidentiary proceedings on those points.