The durable power of attorney is an important tool for any well-rounded estate plan, but it may be even more important for those planning with an eye towards obtaining Medicaid (MassHealth) eligibility.
In essence, establishing a durable power of attorney is a way to protect yourself should a day come when you are no longer able to make critical decisions due to illness, injury or the potentially devastating side effects that sometimes accompany the aging process such as Alzheimer’s. The person creating the power (the principal) nominates a person or persons (the attorney-in-fact) to act for him or her in ways that are specifically authorized in the instrument creating the power. The power remains (or becomes) effective if and when the principal becomes incapacitated, thus allowing the principal to dictate the terms of how he or she will be cared for, as well as how his or her estate will be handled, should the need arise.
This is of particular importance to those formulating an estate plan well in advance of actually needing long-term care. Suppose, for instance, that you and your family abhor the idea of seeing your life’s savings drained away by the costs of medical care later in life (who doesn’t?). However, you are currently too young and healthy to transfer your property to trusts or take advantage of the other options available to preserve your assets while obtaining MassHealth eligibility. In this case, the best course of action may be to craft your estate plan using a durable power of attorney so that your attorney-in-fact will have the powers necessary to execute your plans at a later date.
If properly drafted, a durable power of attorney can allow your agent, when the need arises, to make the transfers that may allow you to qualify for MassHealth and to enter into contracts for your long-term care. If you become unable to execute your estate plan, your agent can still be directed to act on your behalf, thereby giving you an assurance that your wishes will be respected and your interests protected.
There are many other benefits and considerations to take into account when establishing a power of attorney. For more information speak with a Massachusetts estate planning attorney.