At least once every decade, a review of estate planning documents, including a power-of-attorney (“POA”) document, is probably a good idea to determine if any updates are needed. A POA document is a legal document that allows one to appoint those they trust to handle a range of financial and legal affairs on their behalf. A common POA function is to sign checks or deal with banks in general. However, if a person ends up in a nursing home (or other long-term care) situation, there are quite a few different tasks an appointed POA may find themselves dealing with.
For example, an elderly widow (with cognitive issues) who has one adult daughter takes a bad fall at her home. She is first taken to the hospital for treatment. Given her age and cognitive issues, she is transferred to a skilled nursing facility. The daughter, who holds Power of Attorney, knows that she must apply for Medicaid for her mother. She signs the Medicaid papers on her mother’s behalf. Still, the POA document has no language about Medicaid, applying for public benefits, or delegating authority. As such, the Department of JFS rejects the application, citing that the daughter does not have appropriate authority under the POA document to sign on her mother’s behalf.
In a second example, an elderly married couple owns their home together. The husband has advanced Alzheimer’s, and the wife has taken care of him for several years. It is now time to place the husband into a skilled nursing facility. The husband has reached the point where he can no longer sign his name. The wife is POA for her husband and wishes to sign the house deed over to herself and then apply for Medicaid benefits for the husband. The POA document does not have any language allowing for the wife to “self-deal,” and in this case, signing over the husband’s interest in the house to herself is a “self-deal.”
In a final example, an elderly man enters the nursing home. He has no significant assets and would otherwise immediately qualify for Medicaid, except his income is over the special income level (a statutory amount currently at $2,829/month). This means that a Qualified Income Trust must be set up on his behalf to qualify for Medicaid benefits. His son, who is his POA, would like to set up this trust for him, but the POA document does not allow the POA to create trusts on the father’s behalf. This language must be expressly written in the POA document for the POA to be allowed to create a trust on behalf of the elder.
These are just a few examples of what can happen without a proper POA document in place. It is not necessarily that the POA document is dated but rather that the document does not contain language for these types of advanced situations. It is recommended that anyone entering retirement or already in retirement have their POA documents reviewed by an Elder Law Attorney to ensure that their POA documents contain all necessary and helpful language for any of these types of events.
If you wish to discuss the creation of an estate plan or review an existing one, please contact any of our Critchfield estate planning or elder law attorneys for a consultation.
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