How to Handle Sibling Disputes Over a Power of Attorney

A power of attorney is one of the most important estate planning documents, but when one sibling is named in a power of attorney, there is the potential for disputes with other siblings. No matter which side you are on, it is important to know your rights and limitations.

A power of attorney allows someone to appoint another person — an “attorney-in-fact” or “agent” — to act in place of him or her – the “principal” — if the principal ever becomes incapacitated. There are two types of powers of attorney: financial and medical. Financial powers of attorney usually include the right to open bank accounts, withdraw funds from bank accounts, trade stock, pay bills, and cash checks. They could also include the right to give gifts. Medical powers of attorney allow the agent to make health care decisions. In all of these tasks, the agent is required to act in the best interests of the principal. The power of attorney document explains the specific duties of the agent.

When a parent names only one child to be the agent under a power of attorney, it can cause bad feelings and distrust. If you are dealing with a sibling who has been named agent under a power of attorney or if you have been named agent under a power of attorney over your siblings, the following are some things to keep in mind:

  • Right to information. Your parent doesn’t have to tell you whom he or she chose as the agent. In addition, the agent under the power of attorney isn’t required to provide information about the parent to other family members.
  • Access to the parent. An agent under a financial power of attorney should not have the right to bar a sibling from seeing their parent. A medical power of attorney may give the agent the right to prevent access to a parent if the agent believes the visit would be detrimental to the parent’s health.
  • Revoking a power of attorney. As long as the parent is competent, he or she can revoke a power of attorney at any time for any reason. The parent should put the revocation in writing and inform the old agent.
  • Removing an agent under power of attorney. Once a parent is no longer competent, he or she cannot revoke the power of attorney. If the agent is acting improperly, family members can file a petition in court challenging the agent. If the court finds the agent is not acting in the principal’s best interest, the court can revoke the power of attorney and appoint a guardian.
  • The power of attorney ends at death.If the principal under the power of attorney dies, the agent no longer has any power over the principal’s estate. The court will need to appoint an executor or personal representative to manage the decedent’s property.

If you are drafting a power of attorney document and want to avoid the potential for conflicts, there are some options. You can name co-agents in the document. You need to be careful how this is worded or it could cause more problems. The best way to name two co-agents is to let the agents act separately. Another option is to steer clear of family members and name a professional fiduciary.

Sibling disputes over how to provide care or where a parent will live can escalate into a guardianship battle that can cost the family thousands of dollars. Drafting a formal sibling agreement (also called a family care agreement) is a way to give guidance to the agent under the power of attorney and provide for consequences if the agreement isn’t followed. Even if you don’t draft a formal agreement, openly talking about the areas of potential disagreement can help. If necessary, a mediator can help families come to an agreement on care.

To determine the best way for your family to provide care, consult with one of our elder law attorneys at Pearson Bollman Law.

This article was reprinted with the permission of ElderLawAnswers.com.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Aretha Franklin’s Lack of a Will Could Cause Huge Problems

According to court documents, legendary singer Aretha Franklin did not have a will when she died, opening up her estate to public scrutiny and potential problems. Failing to create an estate plan can cause lots of headaches for heirs, in addition to unnecessary costs.

Franklin, who died August 16, 2018, at age 76, left behind four sons, but no guidance on how to distribute her reported $80 million estate. According to The New York Times, her sons filed paperwork in Oakland County, Michigan, indicating that she died intestate — that is, without a will. The sons nominated Franklin’s niece to serve as the personal representative of the estate. When someone dies without a will, the estate is divided according to state law. Under Michigan law, an unmarried decedent’s estate is distributed to his or her children. (Franklin had been married twice but long since divorced.)

Even if the “Queen of Soul” had wanted her estate to go solely to her children, by not having a will or trust, her estate will have to go through a long public probate process, which will likely cost her estate considerable money. If Franklin, who was quite private in life, had created an estate plan that included a will and a trust, she could have avoided probate and kept the details of her financial circumstances private.  Her eldest son reportedly has special needs, which presents other potential complications.  In addition, by not having a will, Franklin has opened her estate up to potential challenges that could drag out the probate process. Without a will to clearly state the decedent’s intent, litigation resulting from family conflicts often eats into estates.

Also, because Franklin did not plan her estate, the estate will be subject to unnecessary estate taxation. Although she may not have been able to avoid estate tax entirely, there are steps she could have taken to reduce the amount her estate will have to pay.

“I was after her for a number of years to do a trust,” attorney Don Wilson, who represented Franklin in entertainment matters for the past 28 years, told the Detroit Free Press. “It would have expedited things and kept them out of probate, and kept things private.”

Estate planning is important even if you don’t have Aretha Franklin’s assets. It allows you, while you are still living, to ensure that your property will go to the people you want, in the way you want, and when you want. It permits you to save as much as possible on taxes, court costs, and attorneys’ fees; and it affords the comfort that your loved ones can mourn your loss without being simultaneously burdened with unnecessary red tape and financial confusion.

Contact your attorney to begin working on your estate plan now.

This article was reprinted with the permission of ElderLawAnswers.com.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Last Modified: 08/30/2018

Will I Have to Spend Down My Income For My Wife to Be Eligible for Medicaid?

Question:

My wife may need to go into a nursing home and apply for Medicaid in a little more than five years. She has $930 a month in Social Security and no other income. She does have term life insurance policies of $180,000. I have a pension of $3,500 a month, income through work of $100,000 a year, and $350,000 in term life insurance. Questions: 1) What will happen to her life insurance? 2) Will I have to spend down my pension or work income to make my wife eligible for Medicaid? 4) Will my life insurance be in any jeopardy? I plan to eventually talk to an Eldercare Lawyer.

 

Answer:

Neither of your life insurance policies or your income should be a problem. The life insurance policies have no cash value since they are term policies. You may want to transfer ownership into your name. In addition, you will not need to apply your income to your wife’s cost of care once she receives Medicaid coverage. Just her income would go to the facility. And, yes, it’s important that you consult with a local elder law attorney who can advise you on the best planning strategies and local application of the rules.

This article was reprinted with the permission of ElderLawAnswers.com.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Where’s My New Medicare Card? How to Find Out the Status

The federal government has begun mailing new Medicare cards to 59 million Americans. You should keep track of when your new card will arrive and contact Medicare if you don’t receive it.

As ElderLawAnswers previously reported, to prevent fraud and fight identity theft, the federal government is issuing new cards to all Medicare beneficiaries that will no longer have beneficiaries’ Social Security numbers on them. The government began mailing the cards in April 2018 and the new cards should be completely distributed by April 2019. The cards are being mailed in phases based on the state the beneficiary lives in.

To check the status of card mailing in your state, go here: https://www.medicare.gov/newcard/. The map will show whether Medicare has sent new cards to your state. Once Medicare starts mailing cards to your state, it can take up to a month to receive the card. If the government has finished mailing the cards to your state, and you did not receive a card, contact Medicare right away at 1-800-MEDICARE (633-4227) or 1-877-486-2048 for TTY users.

If the government hasn’t begun mailing cards to your state yet, keep checking the website. You can also sign up to receive an email when the card is mailed to you. If your mailing address is not up to date, call 800-772-1213, visit www.ssa.gov, or go to a local Social Security office to update it.

If you haven’t received the new card yet, keep using the old card. If you have a Medicare Advantage plan, the Medicare Advantage Plan ID card is your main card, but your doctor may want to see your new Medicare card as well, so keep it handy.

As we reported, phone scammers are using the introduction of the new cards as an opportunity to separate Medicare beneficiaries from their money. One of the main scams that has emerged is a call requiring payment before the card can be issued. The cards are free and you don’t need to do anything to get yours. For more on the scams and what to do if you fall victim, see Reuters columnist Mark Miller’s recent column.

For information on the new cards, go here: https://www.medicare.gov/newcard/.

This article was reprinted with the permission of ElderLawAnswers.com.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Last Modified: 07/06/2018

Will Small Gifts Really Disqualify My Mother from Medicaid?

Question:

Someone told my mom to stop giving monetary gifts to her family — even for very small amounts. She wants to be able to give her grandchildren between $25 to $50 for holidays and special events like weddings or graduations. Will amounts that small really disqualify her from Medicaid or cause her to be penalized? What if she buys gift cards or tangible gifts? Will Medicaid really penalize for this as well?

Answer:

Yes, any gifts can cause a period of ineligibility for Medicaid. The period of time is determined by the amount of money given away and the average cost of nursing home care in the state, and only gifts made during the five years before moving to a nursing home, spending down, and applying for benefits are taken into account. So, if for instance the average cost of a nursing home was $300 a day in your state and over the five years prior to applying for benefits your mother gave away $3,000, she would be ineligible for benefits for 10 days. The family would have to come up with the funds to pay for her care during that time.

That said, the small gifts that you are describing, would likely “fall under the radar.” While your mother would be obligated to report all gifts made during the five-year “look-back” period, such small gifts would probably never be discovered. Further, Medicaid is only supposed to penalize gifts made for the purpose of preserving assets and qualifying for benefits. That does not appear to be the purpose of the gifts you are describing. In short, the technical advice and the advice that any elder law attorney will feel most comfortable with is not to make any gifts. Practically, sporadic gifts of under $100 each are unlikely to present a problem. Just don’t stretch the envelope and try to use this as a way to save assets from being spent on your mother’s care.

For more information about Medicaid’s asset transfer rules, click here.

This article was reprinted with the permission of ElderLawAnswers.com.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Last Modified: 07/10/2018

How Much Do I Pay My Agent Under a Power of Attorney?

Question:

I want to appoint my neighbor to be my agent under a power of attorney for health care. I have no idea what people usually pay for someone to be an agent under a power of attorney. What should I pay my neighbor?

Answer:

Typically, people appoint family members and friends to serve as their agents under health care proxies or health care powers of attorney and the people appointed do not charge for their services. This is also true of agents for financial and legal matters under durable powers of attorney. However, sometimes clients appoint professionals, such as attorneys and accountants, to serve under durable powers of attorney, in which case they do charge for their time. Such professionals are usually reluctant to take on duties as personal and potentially time consuming as serving as health care agent, so there isn’t a tradition of paying for these services. The result is that it’s really between you and your neighbor. You might agree on an hourly rate or even something that seems less like employment, such as offering to make a donation to your neighbor’s favorite charity or house of worship.

For more information about health care decisions, click here.

This article was reprinted with the permission of ElderLawAnswers.com.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

When Can an Adult Child Be Liable for a Parent’s Nursing Home Bill?

Although a nursing home cannot require a child to be personally liable for their parent’s nursing home bill, there are circumstances in which children can end up having to pay. This is a major reason why it is important to read any admission agreements carefully before signing.

Federal regulations prevent a nursing home from requiring a third party to be personally liable as a condition of admission. However, children of nursing home residents often sign the nursing home admission agreement as the “responsible party.” This is a confusing term and it isn’t always clear from the contract what it means.

Typically, the responsible party is agreeing to do everything in his or her power to make sure that the resident pays the nursing home from the resident’s funds. If the resident runs out of funds, the responsible party may be required to apply for Medicaid on the resident’s behalf. If the responsible party doesn’t follow through on applying for Medicaid or provide the state with all the information needed to determine Medicaid eligibility, the nursing home may sue the responsible party for breach of contract. In addition, if a responsible party misuses a resident’s funds instead of paying the resident’s bill, the nursing home may also sue the responsible party. In both these circumstances, the responsible party may end up having to pay the nursing home out of his or her own funds.

In a case in New York, a son signed an admission agreement for his mother as the responsible party. After the mother died, the nursing home sued the son for breach of contract, arguing that he failed to apply for Medicaid or use his mother’s money to pay the nursing home and that he fraudulently transferred her money to himself. The court ruled that the son could be liable for breach of contract even though the admission agreement did not require the son to use his own funds to pay the nursing home. (Jewish Home Lifecare v. Ast, N.Y. Sup. Ct., New York Cty., No. 161001/14, July 17,2015).

Although it is against the law to require a child to sign an admission agreement as the person who guarantees payment, it is important to read the contract carefully because some nursing homes still have language in their contracts that violates the regulations. If possible, consult with your attorney before signing an admission agreement.

Another way children may be liable for a nursing home bill is through filial responsibility laws. These laws obligate adult children to provide necessities like food, clothing, housing, and medical attention for their indigent parents. Filial responsibility laws have been rarely enforced, but as it has become more difficult to qualify for Medicaid, states are more likely to use them. Pennsylvania is one state that has used filial responsibility laws aggressively.

This article was reprinted with the permission of ElderLawAnswers.com.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Last Modified: 06/28/2018

Medicare Extends Deadline for Relief from Part B Penalties

Medicare is extending its offer of relief from penalties for certain Medicare beneficiaries who enrolled in Medicare Part A and had coverage through the individual marketplace. Beneficiaries who qualify will be able to enroll in Medicare Part B without paying a penalty for late enrollment if they enroll by September 30, 2018.

Individuals who do not enroll in Medicare Part B when they first become eligible face a stiff penalty, unless they are still working and their employer’s plan is considered “primary.” For each year that these individuals put off enrolling, their monthly premium increases by 10 percent — permanently.

Some people with marketplace plans – that is, plans purchased by individuals or families, not through employers — did not enroll in Medicare Part B when they were first eligible. Purchasing a marketplace plan with financial assistance from the Affordable Care Act (aka Obamacare) can be cheaper than enrolling in Medicare Part B. However, Medicare recipients are not eligible for marketplace financial assistance plans. And because marketplace plans are not considered equivalent coverage to Medicare Part B, signing up late for Part B will result in a late enrollment penalty.

To address this problem, the Centers for Medicare and Medicaid Services (CMS) is allowing individuals who enrolled in Medicare Part A and had coverage through a marketplace plan to enroll in Medicare Part B without a penalty. It is also allowing individuals who dropped marketplace coverage and are paying a late enrollment penalty for Medicare Part B to reduce their penalty. CMS is now expanding the offer of possible relief to people who should have signed up for Part B during a special enrollment period that ended Oct. 1, 2013, or later but instead used exchange plans. It is also extending the deadline to September 30, 2018 (the earlier deadline was September 30, 2017).

To be eligible for the relief, the individual must:

Have an initial Medicare enrollment period that began April 1, 2013 or later; or

Have been notified on October 1, 2013, or later that they were retroactively eligible for premium-free Medicare Part A; or

Have a Part B Special Enrollment Period that ended October 1, 2013, or later

This offer is available for only a short time. To be eligible for the relief, individuals must request it by September 30, 2018. Gather any documentation you have to prove that you are enrolled in a marketplace plan. Individuals who are eligible should contact Social Security at 1-800-772-1213 or visit their local Social Security office and request to take advantage of the “equitable relief.”

For more information, click here.

For more information about Medicare’s late-enrollment penalties, click here.

This article was reprinted with the permission of ElderLawAnswers.com.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Last Modified: 06/28/2018

Court Overturns Obama Rule Protecting Investors Saving for Retirement

A U.S. court of appeal has struck down a Department of Labor (DOL) rule that was intended to prevent financial advisers from steering their clients to bad retirement investments, but the Securities and Exchange Commission (SEC) has proposed new regulations to at least partially address the same problem.

Prompted by concern that many financial advisors have a sales incentive to recommend to their clients retirement investments with high fees and low returns because the advisors get higher commissions or other incentives, in February 2015 President Obama directed the DOL to draw up rules that require financial advisors to act like fiduciaries. A fiduciary must provide thehighest standard of care under the law.

Several industry trade groups sued to overturn the-so-called fiduciary rule, arguing that the DOL overstepped its authority in enacting the regulation. A federal court judge initially upheld the rule, but in March 2018, the U.S. Court of Appeals for the Fifth Circuit overturned it. According to the court, the DOL did not have the authority to enact the rule. The court criticized the DOL for overstepping its boundaries into an area that should be handled by the SEC. The Trump administration, which delayed the fiduciary rule at first, but eventually allowed it to go into effect, has not appealed the decision.

While the fiduciary rule might be dead for now, the SEC has proposed new regulations that would require investment brokers to act in the best interest of their client when recommending an investment. It also requires brokers to disclose or mitigate conflicts of interest. The proposed regulations do not, however, define what “best interest” means, which may cause confusion for brokers and consumers. There is a long road ahead before these regulations are approved. The SEC is accepting comments on the regulations until August 7, 2018.

Even if the SEC’s regulations are approved, they do not solve every problem. Consumers should always use caution when selecting a financial adviser. In particular, consumers should check their financial adviser’s experience and credentials and beware of phony credentials.

To read the proposed SEC rule, click here.

To read an article about the proposed rule from Bloomberg, click here.

Last Modified: 06/11/2018

This article was reprinted with the permission of ElderLawAnswers.com.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.

Now That My Daughter Is Married, Should I Change Her Name on My Power of Attorney Form?

Question:
I have a durable power of attorney with my daughter as the attorney-in-fact. My daughter has married and has a new last name.  Do I need to change her surname on the power of attorney form, and if so, how do I go about this?
Answer:

Your durable power of attorney is still effective, but it could cause some confusion. So the best solution is to sign a new power of attorney replacing the old one and using your daughter’s new name.

For more information about powers of attorney, click here.

This article was reprinted with the permission of ElderLawAnswers.com.  If you have any questions regarding the material in this article and how it applies to you, please contact Pearson Bollman Law at 515-727-0986.