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Power of Attorney- Do You Have the Right Person For the Job?

Posted 6 years 156 days ago ago by Danielle Streed

When it comes to serving as a durable power of attorney, there are many things that you need to consider before nominating someone. 

1. Is this person capable of handling the financial day-to-day matters for you or is their own life so frenzied that this will be difficult? 
2. Is the person that you're naming financially sound themselves or will managing your money be a temptation to them?
3. Is your agent under the  durable power of attorney conveniently located or do they have access to technology to be able to handle such things as banking from another town or state, working with your investment advisor and/or a realtor?

When it comes to serving as a durable power of attorney, it is important that they possess common sense, good money management skills and that they are financially secure themselves.  The problem with too many families is that they name a child,  grandchild or extended family member to serve as their agent and they don't have answers to the above questions ahead of time. If you don’t designate a capable and trustworthy agent, your estate might find itself embroiled in what has commonly been referred to elder law litigation. It is the result of an agent misusing their powers and  engaging in self-dealing. Many of these agents have a feeling of entitlement and that they are owed something and have no qualms helping themself to the Principal’s funds for their own personal use.  That  is not their job.  In many situations, the agent under the durable power of attorney really never understands their role.  In a recent case a daughter was serving as the agent under her mother’s durable power of attorney. As part of some medicaid planning, all of mom’s assets were transferred out the mother’s name to qualify for Medicaid. The assets were placed in the daughter/agent’s name to protect them from medicaid recovery at death. At the time of mom's death all of the assets, per the Medicaid planning process, had been transferred to the daughter/power of attorney's name. The daughter claimed the assets as her own  when in fact the transfer of was merely a strategic move to protect the assets from Medicaid recovery.  The probate court ultimately ruled that  the power of attorney was holding those assets in “ trust “ for the benefit of her other siblings until mom's death. That the transfer of the assets was not to create ownership with the daughter but to use as a  Medicaid planning tool.  Again, when it comes to setting up a durable power of attorney, is important to make sure that the person you are naming is trustworthy.

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