Online resource center to help you explore these key issues, and others, regarding your estate.

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Mr. Miller has many years of experience in designing and implementing a comprehensive variety of Trusts, Wills, and other estate planning documents, as well as settling estates in the most expedient and appropriate method. Further, he counsels and assists clients on becoming eligible for VA benefits and Medi-Cal.

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Mr. Miller has been active in the area of VA Pension and Medi-Cal for well over a decade. He uses various specialized types of Trusts as well as non-trust strategies to gain eligibility for his clients and save the family money.

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Mr. Miller has been settling estates (both simple and complex) for well over 40 years. The starting point is always to create a strategy to settle the estate in the most efficient manner possible with a minimum of taxes. Often times the strategy created allows the family to bypass Probate Court proceedings.

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What’s the Secret with Powers of Attorney?


By merv,

  Filed under: Elder Law, Estate Planning, Medi-Cal Benefits

Dear Mr. Miller:

My parents are going broke quickly.  What with the care they are receiving at the assisted living facility it is costing over $15,000 per month.  Their income is around $2500.  So $12,500 per month is going out.  They only have $300,000 in the bank.  My calculations show them going broke in less than 2 years and that doesn’t count any price increases by the facility.

I want them to qualify for Medi-Cal assistance.   I’m going to have to make the application for them because neither of them even recognize me anymore.  That is why they created a Living Trust with powers of attorney several years ago.  What’s my next step?

Next Step Daughter

Does Facility Accept Medi-Cal
Net Worth
Is There Authority in the Documents
Types of Powers Of Attorney
Statutory Form
Attorney Drafted Version
Living Trust Approach
Assets Titled in the Trust
Court Approach
What to Do Now

Dear Next:

Does Facility Accept Medi-Cal:  Typically, Medi-Cal only pays for skilled nursing facilities.  However, there are some special Medi-Cal programs that cover assisted living facilities.  So the first step is to see whether their facility is coordinated with any of those programs.  A care manager would be helpful in this regards (yes, I know, more money) as most care managers know which facilities work with which programs.

Then there are two other big issues.

Net Worth:  First, their net worth is way too high.  In most cases with assisted living Medi-Cal programs the net worth limit is $3000 for a couple (Skilled nursing would be $139,400 although that number is going up July 1 to either $260,000 or $267,400 depending on the circumstances.)  In either case, the approach would be the same, they need to spend down their net worth to the relevant limit or give it away.  Giving it away presents other problems and issues that we have explored in other posts. 

Is There Authority in the Documents:  Assuming we are going to follow the giving it away approach and further assuming that you are an only child, we have one really big obstacle.  From your description, your parents are probably legally incompetent to give anything away.  So that brings us to the Power of Attorney and Living Trust that you mentioned.  Is there the necessary authority in either of those documents to give away assets?  Most non-lawyers simply assume that those documents allow the person named to take that action.  That is untrue.  First, Living Trusts (and Powers of Attorney, too) come in many different flavors  and configurations.  Some have that authority included in them, most do not.  When included, this authority is generally found in the Power of Attorney.

Types of Powers Of Attorney:  There are several different methods of classification of this document.  Th most common type is one covering financial matters that is durable.  So let’s deal with that.

Statutory Form:  Within this classification there are attorney drafted versions and statutory form.  The latter’s wording is contained in the California statute.  Sometimes it is a pre-printed form, sometimes typed, and sometimes even typed by the attorney’s office.  No matter its method of creation, they are typically all the same.  One can find the form by doing a Google search for “California Statutory Form Power of Attorney.” You will find several links, many to law libraries and other government agencies.  Statutory form powers of attorney can be short form or long form.  The former simply lists a number of powers (without definition) and the signer initials each power or a line stating all of the above to activate those powers.  The actual powers, themselves, and what the authorized person is entitled to do are defined by the statute.  In the long form version the entire power as defined by the statute is reproduced verbatim in the form. As I mentioned above, sometimes these statutory forms are reproduced by the attorney’s office so I wouldn’t call these attorney drafted versions.

Are these statutory forms good or bad.  Well, that depends on the purpose for which they were used.  These forms do not help with Medi-Cal qualification as they do not authorize gifts to be made.  Neither of the powers labeled “Estate, Trust, and other beneficiary transactions” nor “Benefits from Social Security, Medicare, Medicaid, or Other Governmental Programs, or Military Service” allow gifting.   So if the purpose was to be able to help qualify for Medi-Cal, this form won’t help.

Attorney Drafted Version:  This type might help as it depends on what the attorney added.  Sometimes the attorney takes the statutory form and adds some “custom” clauses to it.  Depending on what is added that might do the trick.  Until the actual document is reviewed it is impossible to tell.

Living Trust Approach:  And sometimes the necessary wording is found somewhere in the Living Trust document.  And again, this simply depends on the attorney’s approach and what he/she included which, hopefully, was based on a complete and detailed interview to determine what was needed as opposed to a paper mill approach–everyone gets the same thing.

Assets Titled in the Trust:  If the bank account is titled in the trust name, then you have a potential additional hurdle.  If the Trust does not have the necessary authority but the power of attorney document does, then in California, the power of attorney and the Trust must be coordinated, i.e. each must refer to the other and give the necessary authority to the person named in the power of attorney document.

Court Approach:  If the documents won’t do the job, then a court proceeding is the alternative.  That can get more expensive, much more expensive if both parents are incompetent.

What to Do Now:  So really, the first step is to contact a competent attorney to review those documents and advise you on your options.  We do this all the time and even with statutory powers of attorney, many times have identified the necessary language in the documents or determined that the parents really are competent despite the child’s thoughts to the contrary.  Call us at 760-436-8832 for a confidential consultation.

 

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About Living Trusts

About Living Trusts is hosted by the Law Offices of Merwyn J. Miller, as your online resource center to help you explore these key issues, and others, regarding your estate.

Merwyn J. Miller, J.D.

  • Board Certified Specialist in Estate Planning, Trust & Probate Law
  • Co-Author of legal text book and of “Don’t Go Broke in a Nursing Home
  • Teacher of law courses at public and private colleges
  • Continuing Education Instructor for attorneys
  • Columnist for largest regional newspaper in San Diego County and professional journals for 15 years, Contributing author to the book “In Your Service: The Veteran’s Friend”
  • Masters Degree in Financial Services - Estate Planning
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