I went to seminar put on by a large local elder care attorney firm, and they give a talk, get your information, and then call you to see if they can see your loved ones POA. I scanned it over to them, and then they called and said I needed to change the language to include 'gifting " in the POA. I was hoping to get some answers regarding financials about moving my almost 91 yr old mother in my home, and not being hit with that gifting penalty due the needed renovations for her to live here, specifically a bathroom, chairlift, and for her to have her own apartment space. My mother had the current POA drawn up by an attorney she trusts-
I am wondering if some of these firms are just trying to make the $550 to redo POAs, as it seemed like the attorney didn't want to give me my "free" consultation, and wanted to get off the phone quickly,after I said I didn't think my mother would want to sign a new POA agreement, since she is quite stubborn. They had said in the seminar that you could take an hour or two, and go over may things, I was interested in VA benefit information, too. Anyone else encounter these types of firms, and is their really "gifting language " that can help on the possible Medicaid needs dowm the road? My mother does not have a lot of money, so It is definitely on my mind, as to not get in a situation down the road.
My sister and her husband had wills prepared by a general practice attorney. Later, when reviewed by an elder law attorney, they found that: 1) Her will was invalid because it had never even been dated. 2) The manner used to leave their assets at death was not the most tax-advantageous. 3) The manner used to bequeath their assets made the estate subject to a probate process that would have been lengthy and difficult (and incidentally, would incur a lot more legal fees). 4) The attorney named himself as back-up representative or executor (more fees for him). While legal, this is ethically shaky.
Additionally, he had not recommended that they have DPOAs, living wills, or perform other important planning.
Fortunately, the elder law attorney was able to address all their needs and saved them and their heirs thousands of dollars as well as a lot of unnecessary trouble. His fee was more than repaid by the extra money they were able to leave their church, not to mention the aggravation I was saved as personal representative by not having to inventory all their personal assets and go through probate.
An attorney who does not specialize in these matters may be quite well-intentioned, but he may not know what he doesn't know. If he can't explain the reason for his "gifting clause" opinion to your satisfaction, go elsewhere.
I agree with contacting the trusted attorney who prepared the POA with your question and tell him where you got the info. If he rebuffs or ridicules you for asking, I'd question his knowledge of the issue and consider asking for his recommendation for an elder law specialist--more to rankle him than otherwise; but he might give you a helpful referral.
I agree that you should consult an attorney about the modifications to your house, but if your mom is still conducting her own financial affairs such as writing checks and paying bills, it would seem that she could directly pay for the modifications for her use.
.....Duewe, Cheatum & Howe!
But back to your ?....you mention that moms moving to your house has/will placed costs. Like for renovations, lift, etc. and you are thinking that mom could gift you $ to offset all those costs. That's correct, right?
If so, Realize that if this is gifting. If mom should need a higher level of care and she moves into a facility and applies for Medicaid, the state can require mom (aka you as her DPOA) to provide 5 years of all financials. Done today that means going back to 2012. And that $ given to you for work done on your house will be viewed as gifting. It's your property that is getting renovated, not moms. There is planning that can be done that is within Medicaid rules though.
Mom can instead do 2 things:
a personal services contract AND rental agreement.
Both drawn up by an atty & not by Duewe, Cheatum & Howe. I'd suggest that if moms old atty is not a NAELA level elder law atty that you ask old atty for a referral to a naela in your state. All needs to be done above board with taxes paid, etc.
If mom has or is about to sell her home AND also could get VAs Aid & Attendance, well, mom is going to have a big bigly puddle of a$$et$. So getting updated legal done is a good idea, as is getting whatever contracts & updated legal done so that all are Medicaid compliant. Really whatever needs to be done so that if mom should need a facility later on, and has run through her $, that she can qualify for Medicaid with no gifting transfer penalties.
Things change; caregivers run out of ability; mom could live another decade as those who are in their 90's are outside of any health or aging chart. Unless mom had you as a very very late in life baby, you are in your 70's. You don't want a problem 4 years from now as to improper transfer of moms $ and mom needs to be in a NH. Mom has the $ to get solid experienced legal done & that means NAELA.
I'd find a better attorney to consult T.P. Crawford, I think.
A better solution may be to authorize the Agent to make gifts. There may be a number of times in which gifting, by the Agent of an incompetent Principal, could be very important. One might be planning that happens after incompetency where planning is being done through gifting to reduce taxes. Another may be reducing the Principal’s assets through gifting in order to get the Principal qualified to get Government benefits to pay for the Principal’s nursing home care costs.
Thus, I would recommend that you review your existing Power of Attorney. See if it contains express language authorizing the Agent to make gifts. See if any restrictions have been placed on the Agent’s ability to make gifts. Laws can be different from state to state. You need to know what your state law provides and what the requirements are to have a valid Power of Attorney in your state. Consult with Attorney T. P. Crawford and tell him that you want your Agent to be able to make gifts to protect your assets from being sold to pay for nursing home care costs.
Trust your instincts on this!
Why not contact your mother's trusted attorney and check out with him whether the adaptations to your home needed for your mother to come and live with you could be paid for by her without incurring penalties down the line? An attorney you know to be trustworthy is worth his weight in gold.