Powers of Attorney After Incapacity: Medicaid Planning Authority, Gifting and Trust Powers, Agent Liability

This CLE webinar will examine drafting powers of attorney that preserve Medicaid and long-term care planning options after a client loses capacity, and advising agents who must carry out that planning. The panel will address which powers must be expressly granted, the fiduciary duties governing gifts and transactions that benefit the agent or family members, third-party refusals, and the options available when the power of attorney is inadequate.

For many elderly clients, the power of attorney becomes the main instrument through which planning can occur after capacity is lost. By the time a nursing home admission forces the issue, the client may no longer be able to sign a trust, deed, beneficiary change, or other planning document. Whatever planning remains available may depend on the authority already granted to the agent.

A general grant authorizing the agent to do "all acts" that the principal could do may not authorize some of the steps Medicaid planning requires. In states following the Uniform Power of Attorney Act, an agent may make gifts, create or amend trusts, change beneficiary designations, or alter survivorship rights only if that authority is expressly granted. Some states impose additional limits on gifts that could leave the principal dependent on Medicaid. Older documents, statutory short forms, and powers drafted under another state's law may leave the agent without the authority needed to implement the plan.

Even where the power of attorney grants broad authority, the agent must act consistently with the principal's known wishes and, when those wishes are not known, in the principal's best interest. Transactions benefiting the agent or family members may raise concerns over fiduciary duties, self-dealing, financial exploitation, the principal's estate plan, and Medicaid eligibility.

Additional problems arise when a financial institution refuses to honor the document, family members challenge the agent's authority, or separate federal rules apply. A power of attorney, for example, does not authorize an agent to manage a principal's Social Security or SSI benefits; if the beneficiary cannot manage those benefits, the agent must separately qualify to serve as representative payee.

Listen as our experienced panel discusses drafting powers of attorney for elder law planning, advising agents exercising broad financial authority, and the options available when the document is inadequate, disputed, or rejected.