We help families protect their assets from the costs of long term care. Often times, however, we are not working with our elderly client directly, but rather with his/her Agent under a Power of Attorney (POA). Unfortunately, we regularly see POAs that do not grant the Agent full authority because items in the General Authority and Specific Authority sections have not been initialed. This has been especially problematic since the Powers of Attorney Act was passed in 2010. As a result, the Agent does not have the authority to make gifts or create irrevocable trusts, which are both commonly necessary to complete asset protection planning.
We’re then left trying to determine whether our client can sign a new POA that is all inclusive. This is possible in some cases, but leaves the family frustrated because they were under a false impression that the existing POA was sufficient and thorough. In other cases it’s not possible, due to incapacity, and we must petition for guardianship and ask the Court to approve the planning. The guardianship option is doable, but the Court typically requires two petitions, one to initially create the guardianship and then another to approve the planning. That process is expensive and takes months. With nursing homes costing $12,000 per month, a significant amount of assets are spent. In some cases, we can’t proceed at all because, as a result of the delay, the assets have been eaten up paying for long term care.
We consider the POA to be the most important estate planning document. It is imperative that it be up-to-date, thorough, all-inclusive, and designate the right Agent(s) for the job. Some attorneys help their clients with the creation of a POA alongside a traditional estate plan, but do not also work in asset protection planning to then see the POA in use. Because we put POAs to use on a daily basis, we see the importance of encouraging clients to include all permitted (general and specific) authorities.
Sincerely,
Michele Procino-Wells, Amber B. Woodland & Leslie Case DiPietro