Illinois has adopted changes to the Power of Attorney Act, which raise the following questions:
How does it fit into you senior estate planning and Elder Law needs?
How does it fit into your asset protection plan for long-term care?
In 2011, the Illinois legislature created major changes to the Power of Attorney Act. The changes took effect July 1, 2011.
There are two types of powers of attorney, healthcare and property. Powers of attorney for healthcare and powers of attorney for property are written instructions that enable you to transfer decision-making authority from you (the principal) to a family member or friend (the agent) under particular circumstances.
Healthcare powers cover medical decisions both during life and at end of life, as well as decisions about housing arrangements, food, etc.
Property powers are about money, payment of bills, real estate, asset protection, investments and tax matters.
We have been able to utilize these documents since 1987 and they are very important because they are an alternative to adult guardianship proceedings. Powers of attorney can survive periods of disability, and that is why they are sometimes referred to as durable powers.
Where do powers of attorney fit in your “Senior” Estate Plan?
Powers of attorney for both health and property are probably the single most important estate plan documents you can have. Without powers of attorney, there is no one who can act for you in health or property related matters without obtaining a guardianship, which requires a hearing in the probate court. Guardianship is expensive, time-consuming and can often be avoided.
Our recommendation is that the Health Power be the base document for your healthcare decisions while the Property Power should allow for the creation of further senior estate plan documents and long-term care planning strategies.
How do powers of attorney help with asset protection planning for long-term care?
Without powers of attorney for property, it is sometimes very difficult to accomplish ethical and legal repositioning and transfers of assets that enable clients to qualify for available governmental benefits such as Medicaid, VA benefits and other related benefits.
While powers of attorney have many components, the gifting power in a power of attorney for property is probably the single most power powerful tool that can be added to it. However, as powerful as this tool is, it can be a source for abuse if not adequately described, administered and monitored. But, make no mistake about it, without the ability to transfer assets it is impossible in some cases to accomplish many asset protection measures for long-term care in our senior years.
Elder Law attorneys differ from estate planning attorneys in the types of powers of attorney that they draft. While both attorneys use powers of attorney for property and healthcare, it is the Elder Law attorneys who insert additional special provisions that will allow repositioning of assets, qualification for governmental benefits, and outright gifting to accomplish Medicaid and VA qualification.
If long-term care is a concern for you as you move from your maturing years to your senior years, then you and your loved ones should seek out an Elder Law attorney to prepare a power of attorney that not only meets the requirements of the 2011 act but also goes beyond the requirements and creates flexibility and power that will allow you to qualify for government benefits and to be eligible for long-term care for the rest of your life.
The full article may be viewed on our website www.ABFerraroLaw.com.