Did you know that you can set aside transactions under New York Mental Hygiene Law § 81.29(d). You can use this tool to protect assets belonging to the incapacitated person.
When a person becomes incapacitated, they may no longer be able to protect themselves from financial exploitation, fraud, or undue influence. That’s where a guardian—and the courts—step in. One powerful tool in a guardian’s arsenal is New York Mental Hygiene Law (MHL) § 81.29(d). This statute allows the court to set aside transactions made by an incapacitated person, providing vital protection for vulnerable individuals.
At RK Law PC, our experienced New York guardianship attorneys regularly assist families and fiduciaries with Article 81 guardianship proceedings. We assist with efforts to reverse or set aside transactions. In this article, we break down what MHL § 81.29(d) does and when it applies. We also advise how courts use it to safeguard the rights of incapacitated individuals.
What Is MHL § 81.29(d) and How does It Relate to Guardian’s Ability to Set Aside Transactions?
MHL § 81.29(d) authorizes a New York court to:
- Revoke, amend, or modify contracts, conveyances, or dispositions made by an incapacitated person, if the court finds that the person was incapacitated at the time of the transaction;
- Invalidate powers of attorney or health care proxies if the agent is not acting in the person’s best interest (learn more about fiduciary misconduct);
- Annul marriages if the person lacked capacity to consent;
- However, the court cannot revoke or modify a will or codicil during the person’s lifetime.
This provision is especially important in cases where a person suffering from dementia or cognitive decline signed over property, money, or legal authority under suspicious circumstances. Under such circumstances you may want to try to set aside transactions taken prior to the appointment of a Guardian.
When Can a Guardian Ask the Court to Set Aside Transactions?
Guardians or other interested parties can petition the court to set aside a transaction under MHL § 81.29(d) when:
- The transaction occurred before the guardianship appointment, and
- There is evidence that the person was already incapacitated at the time, or
- There was a breach of fiduciary duty by a power of attorney or other legal agent.
The court has discretion to evaluate the facts and determine if undoing the transaction is necessary to protect the incapacitated person’s best interests.
Examples of When a Guardian Can Set Aside Transactions
1. Revoking a Power of Attorney
A guardian may ask the court to revoke a power of attorney or health care proxy if it was signed during a period of incapacity. The power of attorney can also be set aside if the appointed agent is not acting in the person’s best interests. Learn more about challenging powers of attorney.
2. Annulment of Marriage
If an incapacitated individual enters into a marriage without understanding the nature or consequences of the relationship, the court may annul the marriage under MHL § 81.29(d).
3. Undoing Financial Transfers
The court may reverse financial transactions—such as gifts, transfers of property, or changes to beneficiary designations—if they occurred during a period of incapacity or under undue influence. This type of relief is similar to a turnover proceeding under SCPA 2104.
Why Choose RK Law PC for Guardianship Litigation?
At RK Law PC, we know how to use the tools of Article 81 to protect incapacitated individuals. and how to set aside transactions. Whether you are seeking to:
- Appoint a guardian,
- Challenge a power of attorney,
- Set aside a suspicious financial transaction, or
- Protect your loved one from exploitation,
Our New York guardianship attorneys are here to help. We combine compassionate representation with aggressive advocacy to ensure that incapacitated individuals are not taken advantage of.
For more information, please contact NYC Probate Litigation, Guardianship, Probate, and Estate Planning attorney Regina Kiperman:
Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com
Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005
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