Several weeks ago, I explained the basic “What” and “Why” of a Power of Attorney document in Part 1 of this blog series. My goal: To provide a basic understanding of the Power of Attorney document and why it’s extremely important for every family.
In Part 2, I examined the basic powers granted in a Power of Attorney to help you make more informed decisions.
Now in the final part of this series, I will examine important Power of Attorney modifications that can help protect you or a loved one should you require skilled nursing care.
Power of Attorney Modifications: A Closer Look
As of 2009, all Powers of Attorney in New York State introduced a modifications section that allow estate planning / elder law attorneys to include additional language into your document that may be helpful in the future.
Although each attorney may have specific items that he/she likes to place into the section, it is advised that you have the following modifications present in order to ensure that all bases are covered in the event that you or a loved one should require skilled nursing care:
In addition to these Power of Attorney modifications, it is also important to note that a basic power of attorney form will only allow your agent to make gifts of your property up the amount of $500 per year, in total. Again, this is not $500 per person, or $500 per transaction – the limit is $500 per year. Period.
In the event that a long term care plan were to need to be implemented for yourself or a loved one, the transactions required in order to implement said plan would far exceed this $500.00 limitation. Please keep in mind that in terms of the law, a gift is not merely “happy birthday, here is a check for $50!” but rather the transferring of wealth to an individual for non-fair market value. For example, if I have a life insurance policy that names my mother as the sole beneficiary but I choose to change the beneficiary to be my spouse, I have technically just gifted my spouse the proceeds of said account. With this in mind, we want to ensure that our Power of Attorney document allows gifting in unlimited amounts. In order to do so, we must initial the Statutory Gifts Rider section of the Power of Attorney.
By initialing this section of the document, you will now be forced to complete the Statutory Gifts Rider which is placed at the very end of the Power of Attorney document. The Statutory Gifts Rider itself may be modified in order to ensure that your agent has the authority for unlimited gifting in the event that it were to be needed in the future (i.e. for a long term care plan).
I encourage you to talk to your estate planning attorney about these Power of Attorney modifications, and other important estate planning documents. They are a critical part of any long-term plan to give yourself and your family peace of mind.
We’ve all heard of Power of Attorney documents, but many of us (particularly younger families) probably haven’t thought about how they can affect us and our loved ones. I hope that through this 3-part series, I have helped illuminate why this document is important for YOU, and given you the confidence to meet with an attorney. If you have any questions at all or if I can be of any help, please don’t hesitate to call me at 235-5885, or you can contact me through our website.
Related Topics: Estate Planning, Retirement Planning