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Learn how Powers of Attorney play a crucial role in safeguarding your health, finances, and Medicaid eligibility, ensuring you and your loved ones are well-protected for the future.

While the Texas legislature has prescribed the form of the Medical Power of Attorney, a Durable Power of Attorney need only be substantially similar to the statutory form to be effective.

Understanding Durable and Medical Powers of Attorney

Since you may be among the 39% of us who will someday need nursing home care and since 96% of Texans run out of money within six months of entering a nursing home, you may want your Durable Power of Attorney to empower your agent to help you qualify for Medicaid – and to eliminate provisions which could disqualify you. Prime among them is restricting gifting not to the annual federal estate tax exemption ($18,000 in 2024) but to the much lower Medicaid level of $200 in any given month (in the five years before you apply). It should be coupled with allowing unlimited gifting to your spouse, even if she is your agent, or to a special needs trust for a disabled person.

You might also want to specify the agent’s powers regarding hiring home health, Medicaid planning, and making changes to enable the principal to qualify for Medicaid.

Because the agents under these two powers of attorney may be different people with different views, the Durable Power of Attorney might instruct that agent to pay for such health care providers and treatments as either the principal or the agent under the Medical Power of Attorney may direct.

Medicaid Planning and Asset Protection Strategies

The agent under the Durable Power of Attorney could also be directed to gift to the spouse, other dependents, or disabled people, even up to the entire estate, in order for you to qualify for Medicaid and, in this connection, to sign deeds transferring title on death and a partition and other marital property agreement.

The Durable Power of Attorney might specify that the agent can transfer assets to a Qualified Interest Trust or a Special or Supplemental Needs Trust and can purchase a Medicaid-compliant annuity or non-countable asset in order for the principal to qualify for Medicaid.

Because agents, like principals, are subject to the vagaries of fortune, the Durable Power of Attorney should allow the agent to resign and provide for the agent’s involuntary removal if significant cognitive decline is suspected but the agent refuses to be examined.

It is thought that, apart from internet and phone scams, most elder exploitation is effected using a Durable Power of Attorney. You might require your agent not only to report and provide an accounting to you but also, on request, to provide an accounting to your tax preparer, successor agents and anyone else you may name. The more safety measures there are, the greater the possibility that you will have funds for home health care and assisted living, delaying and perhaps even avoiding the need for nursing home care and nursing home Medicaid.

 

Elder law attorney, Terry Garrett, CELA, is a member of the National Academy of Elder Law Attorneys and is an Approved Guardianship Attorney. She assists people in elder law, estate and special needs planning, guardianship and settling estates. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.

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