Bryan Pelkey
Attorney at Law

Q & A Medicaid & Joint accounts

      Those with family members currently on Medicaid should make sure that the Medicaid recipient’s bank account has a listed beneficiary in the event of the individual’s death.  These accounts are most commonly referred to as “POD” accounts, that is payable on death.  This will allow the monies held in the account to be paid directly to the beneficiary upon death without having to go through the probate process and subject to the claim of the County providing Medicaid benefits.
      On another note, individuals eligible for Medicaid benefits are now allowed to retain the sum of $13,800.00 in assets and still be eligible for Medicaid benefits.  However, once Medicaid eligibility is determined, my recommendation is that these sums be placed in an account with a named beneficiary as set forth above.

JOINT ACCOUNTS
     Finally, a joint account allows the surviving joint account holder to receive the entire account balance upon the death of the first account holder.  However, I would like to remind the reader that if the account was merely a “convenience account”, other beneficiaries entitled to share in the Estate of the decedent may file a claim against these funds.  Therefore, I recommend that the reader review their situation with their attorney to see whether the individual’s Estate plan reflects their actual intentions.

Michael J. Hrab
Attorney at Law
Scolaro, Shulman, Cohen, Fetter & Burstein, P.C

Q & A THE REAL ESTATE MARKET

Scolaro, Shulman, Cohen, Fetter & Burstein, P.C. has recently announced that Michael J. Hrab has been elected partner at the firm.  Michael has been an attorney since 1985, the year he started representing the Self Reliance Syracuse, N.Y. Federal Credit Union (predecessor Credit Union that later merged with the Ukrainian Federal Credit Union). “It has been a great fit for me, as well as the Scolaro Law Firm,” says Michael, who is the Real Estate Department Manager at the firm. We took the opportunity to ask Michael some questions concerning today’s real estate market and his representation of the Ukrainian Federal Credit Union for the Syracuse and Albany branch closings:

Q. As one of our lender’s attorneys in Syracuse and Albany, are there any differences in the requirements for closings?
A. Yes. I learned a long time ago that “when in Rome, do as the Romans do”. The closing practices in Albany are different than in Syracuse.  In Albany, for instance, lenders do not typically rely on Abstracts of Title (the written history of a parcel) or surveys because of the added cost and time.

Q. Why is “Title” so important?
A. “Title” can be interchanged with the word “ownership”.  A purchaser wants to be certain that the seller has good  title or good ownership rights. New York is a “caveat emptor” (let the buyer beware) state so the purchaser must be certain the seller has good title.  Otherwise the purchaser’s real estate investment would be at risk.
      The Ukrainian Federal Credit Union wants to be certain that its loan is a first mortgage lien on the property in case of foreclosure.  In the unfortunate situation where the borrower defaults, the Ukrainian Federal Credit Union wants to know that its loan is secured by property with clean title.

Q. The big topic in America today is foreclosures.  Have you seen many foreclosures from the Ukrainian Federal Credit Union?
A. Thank goodness no! Given our economy, I think it is a credit to our borrowers, and to the Ukrainian Federal Credit Union’s prudent loan underwriting that there is an extremely low foreclosure rate for us.  We make good loans to good borrowers.

Q. What do you recommend to borrowers who are unfortunately facing or considering foreclosure?
A. If a borrower is in financial difficulty, the first rule is to talk to the Credit Union. I understand that this seems contrary to the tendency to avoid creditors as most people do.  However, a lender would rather earn money by the continued receipt of principal and interest payments, rather than by selling or taking back the mortgaged property. Often, the lender is willing to work with the borrower, rather than have a borrower default.

Q. Is there anything a borrower can do in today’s tough economic times?
A. Yes. There are several things. Currently, many people are refinancing or modifying their mortgage to obtain better terms.  A lower interest rate may result in a lower monthly payment.  The borrower should consider the additional closing costs for these transactions.

                The Ukrainian Federal Credit Union encourages members to contact their nearest UFCU branch to discuss  the various mortgage refinance or modification options available. The credit union is always ready to assist its members with their lending needs during these financially challenging times.

Helen A. Zamboni, Attorney at Law
Senior Counsel, Corporate and Business Practice Group
Underberg & Kessler LLP, Rochester, NY

"Q & A Power of Attorney

Q. What is a Power of Attorney?
A. A Power of Attorney is a document by which someone (the “Principal”) gives authority to another person (the “Attorney-in-Fact” or “Agent”) to handle certain kinds of transactions for the Principal.

Q. What kinds of transactions may an Attorney-in-Fact handle for the Principal?
A. In completing the Power of Attorney, the Principal specifies in the document itself the types of matters he or she wants the Agent to be able to handle.   

Q. How long does a Power of Attorney last?
A. Under New York law, unless the document says otherwise, a Power of Attorney is “durable”, that is, it remains in effect until the death of the Principal or until the Principal revokes it.  It does not expire if the Principal becomes incapacitated.

Q. Are there any rules as to how a Power of Attorney is to be used?
A. Yes.  First and most importantly, under the law, the Agent is obligated to use the Power of Attorney for the benefit of the Principal.  For example, the Agent may access the Principal’s account to pay the Principal’s bills, purchase food for the Principal and the like, but not to buy clothes for the Agent.  Misusing the Principal’s assets may subject the Agent to criminal prosecution, and is often the basis for the appointment of someone other than the Agent to be the guardian for an elderly, unsophisticated or mentally impaired Principal. 
       A new law that goes into effect on September 1, 2009 makes sweeping and important changes to New York Powers of Attorney.  This law was adopted in response to many allegations of elder abuse by Attorneys-in-Fact.  A new statutory form of Power of Attorney was included in the law
       The new Power of Attorney clearly states the duties of the Agent and requires the Agent to sign acknowledging that he or she has read the Power of Attorney and understands his or her duties to the Principal.  These duties are essentially a codification of the obligations of an Agent under common law (that is, the law as it has developed as the result of judicial rulings). 
       Under the new law, the Power of Attorney is not valid until signed by the Agent before a notary public.
       New under the statute is the ability of a Principal to appoint a monitor to whom the Agent must report about any transactions carried out by the Agent using the Power of Attorney. 
       By law, an Agent is entitled to reimbursement for reasonable expenses incurred on the Principal’s behalf.  However, the Agent is NOT entitled to be paid for his or her time or effort under the Power of Attorney unless the Principal authorizes such payment on the form.  Again, this is a codification of common law.
       The Agent is not authorized to make gifts in excess of $500 in any calendar year to anyone unless the Principal signs a rider to the Power of Attorney before a notary public and two witnesses.  There is a separate part of that rider that must be initialed by the Principal if he or she authorizes the Agent to make gifts to the Agent.  This rider is also new under the new statute.
       The new law also requires that the Agent sign for the Principal in a manner that clearly indicates his or her role as the Principal’s Agent. For more information please contact your attorney.

"Q & A THIRD PARTY CHECK

Q.  What is a “third party check”?
A.  A “third party check” is a check written by a person (the “drawer”) against the drawer’s account payable to another person (the “payee”), subsequently endorsed by the payee to the order of yet another person (the “third party”).

Q.  Why do credit unions frequently refuse to cash third party checks?
A.  If a check is paid directly to you by the drawer, and you take it to your credit union, the credit union can verify that the signature on the check endorsing it for cash or deposit is indeed your signature.  The credit union has a relationship with you and can make a decision about whether to allow you to cash the check on the spot or require you to deposit it and wait till it clears before you can withdraw cash against it.

      Under the Uniform Commercial Code, the law governing the rights of banks and credit unions and their customers, the last endorser on the check guarantees that all prior endorsements are genuine.  In the case of a third party check, you as the last endorser therefore guarantee to your bank that the drawer’s signature and the payee’s signature endorsing it to you are genuine.

      If one of these signatures is not genuine, and your credit union allowed you to cash the check, the credit union is stuck and is legally permitted to charge you for the amount it paid you. 

      Needless to say, doing so doesn’t make for good customer relationships, so credit unions will typically either refuse to allow members to cash third party checks or require them to be deposited and cleared before withdrawing the corresponding amount of cash.

      Remember that you are an owner of the credit union, along with your fellow members.  Every time the credit union suffers a loss, it affects the credit union’s ability to make loans to its members – a key reason the credit union was founded.

So, when you present a third party check for payment and the credit union says “No”, don’t get angry.  Instead, be glad that your credit union’s management has made a policy decision that protects you and your fellow members.

What is an “official check”?

Q.        What is an “official check”?
A.         An “official check” is a check written against the accounts of the bank or credit union that issued it.  This means the credit of the issuing bank or credit union stands behind the official check, not the credit or account balance of the bank customer or credit union member who requested that the official check be issued.  Other names for this kind of check are “cashier’s check” or “teller’s check”.

Q.         Is a money order different?
A.         Actually, a money order is also drawn against the accounts of the bank or credit union that issued it.  The difference is technical, but in this article, when the term “official check” is used, it includes “money order” as well.

Q.         If UFCU issues an official check for me, can I later stop payment on it?
A          UFCU’s policy is to follow New York State law if a member wants to stop payment on an official check.  Under the law, a member who purchased an official check (a “remitter”) may order UFCU to stop payment on an official check under very limited circumstances.  The stop order may not be given until after 90 days after the check was issued. 

            The stop order must provide as much detail as possible to allow UFCU to identify the official check (the date of issuance, the amount, the payee, for example; a copy of the check is, of course, best) plus an affidavit swearing to one of the following reasons why the stop order should be recognized: (1) the check was destroyed, or (2) the check was lost or misplaced and can’t be found, or (3) the customer or member believes that the check fell into the hands of someone who had no right to it.

Q.         Why is it so hard to stop payment of an official check?
A.         Remember, the official check is written against Ukrainian FCU’s credit.  The law protects Ukrainian FCU against refunding the customer’s money for the stopped check and then having to pay on the check itself should it be presented for payment.  UFCU can’t refuse to pay an official check before it is older than 90 days.  If the official check hasn’t been presented for payment by then, it may be safe to assume it wasn’t is one of the criteria required in the affidavit that must accompany the stop order.