Without a Power of Attorneys, a court appointed guardian may be necessary. The guardianship process is not only expensive, but it can be intrusive, inflexible and even embarrassing. Under the guardianship law, the guardian may not be able to address all of the issues that could have been effectively managed by the agent under a Power of Attorneys.
Our Elder Law practices are so much more than business transactions. They are relationships that are personally and professionally satisfying for us as attorneys and as individuals. On the part of our clients, I can only quote a recent client of mine who after I described my services, said with a smile, “You’re one of the good guys.†Yes, Elder Law lawyers are good guys and gals. Don’t ever let anyone tell you otherwise!
As readers of these articles in the Senior News will know, the Medicaid laws permit seniors to protect a substantial part of their life savings from the ruinous costs of nursing home care. But while it is legal to do this, is it ethical? An editorial by Diana Conway in the January 27, 2003 issue of Newsweek magazine ("Cheating Uncle Sam For Mom and Dad") says "No." It characterizes Medicaid planning as an unethical practice used by clever lawyers and "opportunists in search of legal loopholes" to hide their assets at the expense of all other taxpayers.
When a person dies, it is often necessary to follow formal procedures in settling the estate. The process is called Estate Administration. Both state and federal law establish certain requirements that must be followed.
Wills
If you are involved with a person who has died, make sure that their home is secure and nothing is lost or destroyed. In Pennsylvania, other than a spouse, no one can enter a safe deposit box without arranging an inventory. Shortly after the funeral, an attorney should be contacted by the survivors to discuss the decedent's (the deceased person's) matters and estate. The attorney will provide advice, determine whether administration will be required and explain what procedures will be involved. If there is a last Will, the person named as executor should produce the original of it and give it to the attorney along with a death certificate at the first meeting.
Trusts
In the last several years, we have heard much about using techniques, such as “living trusts,†to avoid probate. Beware - avoiding probate does not mean you avoid any taxes. All assets transferred to a revocable living trust are fully inheritance taxable upon death. Such trusts also do not serve to protect any assets from the high costs of nursing home care, and in fact, can be detrimental to qualifying for Medicaid. These trusts are often sold by “trust mills†who hold free dinners to entice customers. The Attorney General of Pennsylvania has issued a consumer advisory warning about these trust mills and has commenced a lawsuit against several of these outfits. There are other methods to avoid probate than by the means of these trusts.
Power of Attorney
The Truth: Your best tool to be able to plan for Medicaid eligibility, should you ever need it, is to sign a general, durable Power of Attorneys that includes a "gifting" power. Your agent under the Power of Attorneys will only be able to re-title your assets if your Power of Attorneys contains "power to make gifts." Most powers of attorney don't contain this, so you might want to ask your attorney to add it.
Administration of estates involves collection of assets, payment of obligations such as debts and expenses and death tax preparation (federal and state) and filing, and distribution of property to heirs and beneficiaries.