When we are asked “Do I need a Power of Attorney?” we respond that everyone who has trusted family member or trusted close friend should have a Durable Power of Attorney.
This legal document enables the agent named in the document to carry out financial business on behalf of the person. This document becomes particularly important if a person loses capacity. A properly created Durable Power of Attorney can help to avoid costly legal proceedings.
Powers of Attorney are immediately effective upon signing. Therefore, you must have a high degree of trust in any agent that you name. Unfortunately, Powers of Attorney can be abused if given to a person who is not looking out for your best interest. It is better not to have a power of attorney than to name an untrustworthy person to be your agent.
Not all powers of attorney are the same.
A power of attorney must provide specific authority to do whatever act the agent is trying to accomplish. Certain acts require a specific listing which must be individually initialed in order to be operative in Florida. One of those specific powers is the power to create a trust.
Since many of the people that we work with are facing paying for long term care and potentially applying for Medicaid, the power to create a trust is of particular concern. If the individual’s income exceeds the income cap ($2350 per month in 2020) a special Qualified Income Trust is required. If the agent does not have the ability to create the trust because the Durable Power of Attorney lacks that specific power, an expensive court proceeding will be required.
Many people think of powers of attorneys as commodities….they are all the same and the main thing is to have one in place before a person becomes incapacitated.
However, a power of attorney that lacks important powers will not be helpful. It is important that if government benefits are going to be a possibility in the future that a you receive advice from someone knowledgeable about what powers may be needed. If you wait until a person has lost capacity and needs a Medicaid application to get help from an elder law attorney, you may face problems that could be avoided.
Feel free to give us a call if you have concerns about the adequacy of your power of attorney.