Durable Power of Attorney
You may already have a “Power of Attorney” document in your files. If so, it’s a helpful instrument for a specific purpose. The agent you have appointed cannot act outside the scope designated in the document. For example: If you owned a home in another state, you could authorize a Power of Attorney in that state to act on your behalf regarding the sale of the home, so you would not have to travel. Following the sale of the home, the Power of Attorney authority would end, and your agent would have no further control over your affairs.
A regular Power of Attorney ends when its purpose has been fulfilled, or if you become incapacitated, or death occurs.
However, a Durable Power of Attorney remains effective even if you become incapacitated. It is very important that you have a Durable Power of Attorney in place when you are applying for Medicaid eligibility, so your agent can act in your behalf regarding all your financial affairs, without court involvement.
Note: The Durable Power of Attorney lists SPECIFICALLY which financial decisions can be made by the attorney-in-fact. If you have a Living Trust, it must be stated in the Durable Power of Attorney that your attorney-in-fact can make changes to your living trust.
The age of the Durable Power of Attorney document may render it invalid. It is important that you have a CURRENT Durable Power of Attorney. It is wisest to choose a close family member, and one who is, hopefully, in close proximity to the patient. It should be noted here that the person you appoint to be your Durable Power of Attorney should be someone in whom you have the utmost trust and confidence, as you are giving them authority to regulate any and all of your affairs, financial and otherwise. A contingent or “alternate” person should also be designated. A Durable Power of Attorney CAN be revoked.
Note: The patient MUST be in a cognitive mental state before this document can be signed. If you are the agent, sometimes it is necessary to wait until first thing in the morning, when the patient is more alert, or shortly after showering, etc. The Durable Power of Attorney requires two witnesses to the patient’s signature, and indicates that the witnesses can attest to the fact that the patient was cognizant of the document he/she was signing at the time. It has been our experience that the nursing staff at most of the nursing homes are not allowed to “witness” these documents, thus you must take two additional persons with you to witness the signature.
Living Will
Most people have a Living Will among their personal documents; however, there is specific Medicaid wording that is essential in a Living Will document before a patient can qualify for Medicaid benefits.
A standard Living Will generally will state that the person signing this document does not want any “heroic” measures taken to prolong their life…no life support systems, no resuscitation methods, etc. However, a Medicaid approved Living Will also states that the patient requests that nutrition and hydration also be withheld…meaning that there would be no water or food given to the patient to artificially prolong life should a terminal illness strike, or if the patient is in an “end stage” condition, or a vegetative state.
Do Not Resuscitate Order
Health Care Surrogate
It may seem like a Health Care Surrogate is a “repeat” of the Durable Power of Attorney, but it is a completely different document. A Durable Power of Attorney can only speak on your behalf regarding financial and legal proceedings. He/she cannot speak for you regarding your health care. You must “appoint” a Health Care Surrogate who will speak on your behalf should you be unable to make medical decisions for yourself. It may be the same person as your Durable Power of Attorney. A contingent or alternate person should also be designated, as in the Durable Power of Attorney. The possibility of a comatose condition following a serious accident would make it critical that you had someone trustworthy appointed to make medical decisions for you.
Note: Everyone should have the above three legal documents in their possession. It is also important that a copy of these three documents travel with you when you leave your home. They can easily be tucked into a suitcase or your handbag. It could save critical time if you were involved in a medical emergency.
Last Will & Testament
Living Trust Revocable
A trust is a three-party arrangement…contractual in nature…whereby one person (the trustor) transfers property to another person (the trustee) for the benefit of a third party (the beneficiary). Trusts are very flexible and can serve many useful purposes. They have been recognized for centuries and are effective vehicles for both lifetime planning and estate planning. (During the past several years, it has become necessary to NOT place a home in the irrevocable trust, because of the Medicaid laws. Once your home has been placed in the trust, it is now a “countable asset”, and not exempt for Medicaid purposes. You would no longer own the home, and cannot get it back. Instead, you would now own a beneficial interest in an irrevocable trust that owns the home.)
An “Intervivos trust” is one that is set up during the lifetime of the trustor, as opposed to a testamentary trust, which is set up by will.
A Revocable Trust is an intervivos trust which by its terms can be amended, revoked, or terminated by the trustor while living and competent. The term “living trust” usually refers to a revocable intervivos trust which the trustor sets up, naming him/herself (or him/her and spouse) as lifetime beneficiary and either him/her spouse or a third party as trustee. Advantages of a Living Trust are that they avoid probate, unlike a Last Will & Testament.
Let’s have an example of Trusts and Medicaid: Five years ago, Mary, a widow, prepares a revocable Living Trust, placing all of her assets in it, and she is the sole beneficiary during her own lifetime. She subsequently develops Alzheimer’s disease, and some other severe disabilities rendering her incapacitated, and requiring skilled nursing care. Her daughter, Nancy, applies for Medicaid benefits for Mary, after realizing the high costs of the Nursing Home. When completing the application, Nancy omitted the assets from the revocable living trust, believing that the trust was protected, and it would not affect her application for her Mom for Medicaid. Was she correct? No. “Revocable” means just that….it can be revoked…and the assets can be used to pay for Mary’s care.
Three benefits of a living trust are: Lifetime planning, for self and others, extending control after death, and minimizing succession costs…avoiding probate, reducing estate and inheritance taxes
Special Needs Trust is a trust established to benefit a disabled person who is eligible for public assistance of some type or types. This is a critical issue if the community spouse passes away before the patient.
Guardianship Documents
If you have had Guardianship awarded to someone for your care as a patient, these documents must be presented at the time of application.
Note: Should you wish to engage the services of The Angel Solution, our affiliate attorneys will be happy to review your current documents, and advise you of any necessary changes to comply with current Medicaid rulings.
