Not all Power of Attorney documents are created equal. And it’s costing families tens of thousands of dollars in asset protection.
The number one problem is a lack of power.
A financial power of attorney, commonly referred to as a “POA” is the cornerstone of every well drafted estate plan. Simply put, a POA allows someone to act for you if you are unable to do so. But what happens when your POA becomes otherwise powerless? Remember, your agent can only do what is authorized under the document.
When planning for Medicaid long-term care, broad powers become an absolute necessity. What so few realize, is that their POA can make or break this type of planning. Certain powers become crucial, especially as we age.
Two common overlooked powers:
- The ability to make gifts.
- The ability to create or amend revocable trusts.
The power to make gifts can often help protect 50-70% of assets for a single individual for instance. Furthermore, the ability to create or amend revocable trusts can save certain assets all together. As an attorney who helps individuals and families become eligible for Medicaid, I have seen these “powerless” POAs cost families tens of thousands of dollars.
Planning for the future…
The right Medicaid planning strategy can protect your assets from the high cost of long-term care. If your agent lacks the necessary powers, they will likely need to obtain a court order. With the added cost of a court proceeding, coupled with private paying $250-300 or more per day during the delay — it adds up quickly.
Do not settle for powerless. If you have a POA or are thinking about establishing one, be sure it contains all of the appropriate provisions that may be needed. Call an experienced estate planning attorney to further discuss and draft a POA that works for you. It is one of the most important (yet modest) investments you will ever make.
Attorney Joseph C. Jones advises clients on estate planning, asset protection, business law, and real estate law matters. Joe can be reached at (906) 914-4181 or joe@jones.law. Jones Law PLC is a Michigan & Wisconsin based provider of legal services.