Power of Attorney – What you Need to Know

(This article was originally published in the Wakefield Daily Item)


Q.   Should I sign a Power of Attorney? 

A.   Yes, you should have a POA but make sure it contains all the powers necessary to achieve your goals.   

 A Power of Attorney (POA) is a critical Estate Planning tool.  By signing a POA, you authorize an Agent (aka attorney-in-fact or POA), to make certain legal and financial decisions for you. Your Agent’s powers are spelled out in the POA.  When you hear the term “durable POA”, it is “durable” because it continues to be effective even if you become incapacitated.

If you do not have a valid POA and you become incapacitated (e.g. stroke, dementia, or car accident), no person is automatically authorized to make decisions for you. Your spouse and children have no rights over your assets.  For example, if your name is on a real estate deed, your family cannot simply sign your name to convey the property even if it is jointly owned by a spouse or child.  If you have an IRA or 401k, your family cannot manage it, even to take out required minimum distributions.

But bear in mind that just because you signed a document that has POA written on the top does not mean you are protected. Your POA is only as effective as the specific powers it contains.  In other words, just because you might have signed a POA in the past does not mean that your POA gives your agent the authority to achieve all of your goals.

What should your POA accomplish?  It should authorize all the basics like paying your bills, managing your bank accounts, and handling retirement accounts.  But if you are like most of our clients, you want to be certain the POA grants the authority necessary to protect your assets to the maximum extent allowed under the law if you become incapacitated and require long term care at home or in a nursing home.  Without these long term asset protection powers, your POA puts your home and savings at serious risk.

Unfortunately, nine out of ten POAs we review at our initial consultations fail to achieve those asset protection goals.  This always comes as a complete shock to clients.  Sure, their existing POA may authorize their agent to pay their bills, but it squarely fails to authorize the actions necessary to prevent MassHealth from recording a lien on their house or taking all their savings if they require nursing home care.

I explain that the drafting attorney was not acting maliciously by omitting that authority.  Unfortunately, their prior attorney was not a specialist in asset protection and long term care planning so he or she did not realize what precise authority must be listed in the POA.  Sometimes the client says they found the POA on the internet or printed it off some software they bought.  The problem is that those run-of-the-mill POAs are not designed for clients who want to protect assets in the event they require long term care.

If the client is fortunate, they have come to us with full decisional capacity so we can prepare a new POA that does in fact achieve their long term asset protection goals.  We call this an Asset Protection POA.  In contrast to the two or three page POAs that we often see in our practice, our POAs will often exceed 20 pages to ensure that we have covered all possible authority to protect our clients’ assets and to avoid a Conservatorship in Court.

But if the client never took action while they had capacity, often their family comes to us in crisis, the elder is incapacitated already, and the elder has either an inadequate POA or no POA at all.  Now the family must file a Conservatorship Petition at the Probate Court and seek special authority to preserve the elder’s assets.  This Court process is time-consuming, stressful and expensive and the appointed Conservator must file annual accountings with the Probate Court.  Worse still, there are no guarantees that the judge will allow the agent to protect the elder’s assets against MassHealth and the nursing home.

While part of our practice is successfully protecting assets in Conservatorship proceedings when it is too late to plan ahead, the process is exponentially more expensive to families than the cost of a well-drafted POA signed in advance of any incapacity.

Be sure that your attorney has extensive experience with MassHealth planning and applications, as well as tax planning, so you can feel confident that the POA will contain the necessary authority in the event it is ever needed.

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Do you have an Elder Law or Estate Planning question? E-mail questions to Info@CurleyLawFirm.com or call 781.245.2222 x10 to be considered for future columns).

About Curley Law Firm LLP

Serving clients throughout Massachusetts, Curley Law Firm LLP draws upon more than four decades of combined Estate Planning and Elder Law experience to ensure that you can achieve your planning goals.

Attorneys Patrick Curley and Lucy Budman are two of fewer than two dozen Certified Elder Law Attorneys (CELA) in Massachusetts. Attorney Mark Curley has practiced in the areas of Estate Planning and Elder Law for over three decades.

The value of working with a firm with CELAs on the team is the peace of mind you receive - knowing that you will get the very best advice available to protect yourself, your family and your assets. A CELA is a recognized expert in legal matters dealing with Estate Planning and Elder Law including Trusts, Wills, Asset Protection against Medicaid and nursing home costs, Medicaid (MassHealth) benefits planning and applications, Probate and Trust administration, Guardianship and Conservatorship, and VA benefits planning.

At a time when many lawyers claim to practice "elder law", having a CELA-led team working on your planning means having one of the very few experts in the Commonwealth on YOUR team.

For experienced representation and quality service from attorneys who will help you achieve your planning goals, please schedule a confidential Initial Consultation by calling us at (866) 406-8582 or visit our website at www.CurleyLawfirm.com



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