Powers of attorney are your financial lifeblood as you enter your senior years, but oftentimes they’re not taken serious until it’s too late.
We had six senior couples come into our office this week, all of whom had powers of attorney that were nothing more than simple documents that would be useful only to clients who are 25 years old. This is a potentially devastating problem that can be corrected if the senior has the requisite mental capacity to execute new documents. If, however, the senior has diminished capacity, then we are left with these almost worthless powers of attorney that do not permit any repositioning of assets in order to properly plan for long-term care, and a path to Medicaid to fund such long-term care.
The solution? Revise any powers of attorney that you currently have, while you can.
Powers of Attorney for Property: Most of the powers of attorney that we see in our office, while valid, are inadequate to allow the necessary repositioning and reclassification of assets to gain eligibility to Medicaid, VA, and other governmental benefits.
Your power of attorney for property must permit, at a minimum, the following powers: the transfer of assets to family members and nonfamily members, with or without compensation being received in exchange; the transfer of the personal residence; the creation, funding and revision of revocable and irrevocable trusts; the authority to apply for various governmental benefits, including Medicare, Medicaid, VA benefits and other benefits; and the ability to change beneficiary designations on various assets.
This is only a small list of must-haves in your power of attorney for property. These tools are most often needed in the senior years when long-term care planning is a necessity so as to avoid having our seniors rendered penniless due to the devastating costs of long-term care.
Powers of Attorney for Healthcare: In January 2015, the Illinois Legislature enacted a new power of attorney for healthcare. However, some bar associations have found this version of the power of attorney to be ineffective in five or six important areas. As of this moment, these defects are being cured through pending legislation in the Illinois General Assembly. The healthcare power of attorney is your authority to express your wishes about your care and the end of your life. Please keep your eyes peeled to this blog for an update on the changes that are forthcoming to make this important document better in the future.
Effective Date: Be careful about selecting an effective date for your power of attorney. Remember you can sign a power of attorney today that either (1) takes effect today, or (2) takes effect upon a future event, such as when your doctor determines you are unable to make financial decisions for yourself. The approach you select will depend on your particular circumstances and your family composition. Remember, anyone can create a document, but correct elder law counseling about that document will help you achieve the best results.
I hope this gives you an overview about the importance of powers of attorney in the state of Illinois. These documents are critical to enable your agent to use Medicaid asset protection strategies to qualify you for Illinois Medicaid should you need institutionalized care.
Remember, most of our clients are trying to preserve some assets for a “rainy day fund” in their senior years, and they are entitled to do so as a matter of exercising their civil rights so long as they do this legally and ethically.
This planning is not done by wealthy individuals, as those persons can pay their way through any costs associated with long-term care. Rather, this planning is best done by middle-class individuals who have worked to accumulate some savings, only to find that the cost of long-term care will make their life’s work disappear in no time.
Our goal, as asset protection attorneys for the middle class is to allow seniors to gain access to the Medicaid program, to use some of their own assets for their cost of long-term care, but also to enable them to preserve some of their assets, so that in their senior years, after a lifetime of work, they are entitled to some dignity and some resources to make a life in a nursing home more livable.
Future blogs will deal with the following topics:
- Revising Powers of Attorney
- Contacting a Physician
- Seeking Guardianship
- Revising Old Wills and Trusts
- Creating a Blueprint
- Inventorying Assets
- Seeking Placement in a Facility
- Selecting a Strategy
- Preparig and Filing the Medicaid Application
- Preparing for the Post Application Audit
To contact me, call 847-292-1220, e-mail email@example.com or visit www.abferrarolaw.com.