I wanted to expand on my first article explaining different types of durable power of attorney in Florida. Because, in the context of Medicaid planning, a well-written power of attorney document is, in some regard, the most important document of them all. What many people do not realize is:
Many Powers of Attorney Forms Do Not Accomplish Medicaid Planning Goals
A client may come into my office proudly showing an old power of attorney document put together by their estate planning attorney a decade ago (or even worse: a form document they purchased online) and believe they are covered. What many fail to realize is that the durable power of attorney is a one-size-fits-all document. A durable power of attorney that works for estate-planning purposes will likely not work for your elder law attorney who needs a more powerful document for Medicaid-planning purposes. The reason is: there are certain actions, unique to Medicaid planning, which are often not contemplated by your estate planning attorney (or the form you downloaded off the internet for $150.00). If
these actions are not specifically authorized in the power of attorney document, they cannot be done by the attorney-in-fact. In short: some durable power of attorney documents are all but useless for qualifying our clients for Medicaid.
How to Handle Sibling Disputes Over a Power of Attorney
A power of attorney allows someone to appoint another person -- an "attorney-in-fact" or “agent” -- to act in place of him or her -- the “principal” -- if the principal ever becomes incapacitated. There are two types of powers of attorney: financial and medical. Financial powers of attorney usually include the right to open bank accounts, withdraw funds from bank accounts, trade stock, pay bills, and cash checks. They could also include the right to give gifts. Medical powers of attorney allow the agent to make health care decisions. In all of these tasks, the agent is required to act in the best interests of the principal. The power of attorney document explains the specific duties of the agent.
When a parent names only one child to be the agent under a power of attorney, it can cause bad feelings and distrust. If you are dealing with a sibling who has been named agent under a power of attorney or if you have been named agent under a power of attorney over your siblings, the following are some things to keep in mind:
- Right to information. Your parent doesn't have to tell you whom he or she chose as the agent. In addition, the agent under the power of attorney isn't required to provide information about the parent to other family members.
- Access to the parent. An agent under a financial power of attorney should not have the right to bar a sibling from seeing their parent. A medical power of attorney may give the agent the right to prevent access to a parent if the agent believes the visit would be detrimental to the parent's health.
- Revoking a power of attorney. As long as the parent is competent, he or she can revoke a power of attorney at any time for any reason. The parent should put the revocation in writing and inform the old agent.
- Removing an agent under power of attorney. Once a parent is no longer competent, he or she cannot revoke the power of attorney. If the agent is acting improperly, family members can file a petition in court challenging the agent. If the court finds the agent is not acting in the principal's best interest, the court can revoke the power of attorney and appoint a guardian.
- The power of attorney ends at death. If the principal under the power of attorney dies, the agent no longer has any power over the principal's estate. The court will need to appoint an executor or personal representative to manage the decedent's property.
If you are drafting a power of attorney document and want to avoid the potential for conflicts, there are some options. You can name co-agents in the document. You need to be careful how this is worded or it could cause more problems. The best way to name two co-agents is to let the agents act separately. Another option is to steer clear of family members and name a professional fiduciary.
Sibling disputes over how to provide care or where a parent will live can escalate into a guardianship battle that can cost the family thousands of dollars. Drafting a formal sibling agreement (also called a family care agreement) is a way to give guidance to the agent under the power of attorney and provide for consequences if the agreement isn't followed. Even if you don't draft a formal agreement, openly talking about the areas of potential disagreement can help. If necessary, a mediator can help families come to an agreement on care.
To determine the best way for your family to provide care, consult with your attorney.
Concerns about Durable Power of Attorney: Loss of Control
No doubt about it: a durable power of attorney can be a dangerous document. In the wrong hands, it would be easy for the agent / attorney-in-fact to literally steal. This concern is valid and durable powers of attorney should only be signed in favor of a trusted family member or
confidante. But, the power of attorney document has some protections built in:
1. There are criminal penalties for abuse of a power of attorney.
2. There are civil remedies that can be brought against the wrongdoer.
3. While our client remains competent, they can revoke the power at any time.
- Revocation must be mailed to the agent (via a method that requires signed receipt); and should be provided to all institutions or third parties who may be relying on the POA.
Remember, If you don’t pick someone, a judge and court may be required to choose someone. In the right hands, a durable power of attorney is an empowering tool because you control who you believe has your best interests at heart and who will be able to act on your behalf when you are no longer able to do so.
POA: Minimizing Need for Guardianship
Guardianship plays an important role and can be highly beneficial when judicial oversight is desired, but usually it takes a long time and is expensive. Most of the time guardianship is a necessary evil that most would prefer to avoid.
A client (or more likely, their family), with severe dementia and unable to understand what is going on around them, may visit an elder law attorney, hoping to get their loved one on Medicaid to pay for their nursing home. If they have not done prior Medicaid planning – our options will be significantly more limited. In this situation, usually a guardianship proceeding is necessary.
If a client comes to me of sound mind, alert and oriented, and therefore with capacity to sign their own documents, I remind them why they are in my office – meeting with a Medicaid attorney: to hope for the best, but plan for the worst – a time when you do not have the capacity to make decisions for yourself. This is difficult to think about, but an important conversation to have nonetheless. We want to put the client in a position where if they lose the ability to make decision for themselves, that their lifetime wishes, and what
is best for them and their families, can proceed unhindered.