Power of Attorney Gift Rider
December 1, 2014
This edition of the Koldin Report E-Newsletter reviews the importance of the Gift Rider in your Power of Attorney.
A Power of Attorney is an important legal document where you give your agent(s) (person you appoint to serve on your behalf) the legal authority to handle your finances and make other decisions on your behalf. If you become incapacitated in the future and have not signed a Power of Attorney, a Guardianship proceeding may become necessary.
New York law provides a standard form commonly known as the “statutory short form.” The “statutory form” has the basic powers. Most general practice attorneys provide their clients with this basic statutory form.
The law then allows for substantial modification of the basic form, including adding a “gift rider.” We have found that most new clients who come to our office either don’t have a Power of Attorney at all or have one prepared by their family attorney without any gift rider.
Most family attorneys likely only view the gift rider for the purpose of making gifts and may have concluded that most of their clients don’t need this power. As Elder Law Attorneys focusing on protecting people’s life savings in the event of a catastrophic illness, the Koldin Law Center, P.C., understands the critical importance of this gift rider.
If someone enters a nursing home and faces the loss of his/her entire life savings, the gift rider allows the agent under the Power of Attorney to transfer assets and take other steps to protect assets from being lost towards the cost of care and to qualify the person for Medicaid coverage. Without such a gift rider, it could become difficult, if not impossible, to protect assets. These transfers should only be done with proper legal advice to ensure they are done in compliance with the current Medicaid laws.
In addition, if there is no gift rider, a spouse will be unable to access funds from an incapacitated spouse’s IRA or 401(k). Many people believe that if they are the beneficiary of their spouse’s retirement account, they may access it themselves at any time. However, without a properly drafted Power of Attorney with the appropriate gifting language, the healthy spouse may not be able to access any accounts that are solely in the ill spouse’s name. The only alternative at that point would be to file a guardianship proceeding which can be costly and time consuming.
For those attorneys that do have their clients include the gift rider, very often they only include the standard form which limits gifts to the federal gift tax exclusion amount which is currently $14,000 per person per calendar year. This restrictive gift amount is rarely sufficient to be able to protect assets in the event of a catastrophic illness nor is it sufficient to provide for the healthy spouse. The standard gift rider form includes a blank modifications section which allows broader gifting powers to be added, but most attorneys rarely add broader gifting language.
The Koldin Law Center, P.C. has prepared an enhanced Power of Attorney with a gift rider that includes a thoroughly completed modifications section that provides additional broad gifting powers we feel are important if a catastrophic illness occurs.
At the Koldin Law Center, P.C. with offices in Syracuse , New York, we have over 40 years of experience helping individuals plan for immediate crisis and long term care. Our attorneys are available to discuss your estate planning options including reviewing your options to include a gift rider with your Power of Attorney.
There is something you can do.
Our Attorneys are available to speak to your organization
Our Attorneys speak to groups throughout New York State as a public service. If you would like to arrange for one of our Attorneys to speak to your group, please contact our office.
We appreciate your referrals
We have been told by many clients who are in a crisis that they wish they had known about our firm much sooner. We are proud of the many families we have helped in times of crisis.
We are also proud of the many families we helped avoid financial crisis by doing estate planning in advance.
We all share the responsibility for making our family and friends aware of the planning options available to them.
Your referral to the could make a major difference in the lives of your family and friends if they are someday faced with a long term illness.
Remember that the offers many services for clients of all ages. Our services range from basic estate planning such as a simple will to complex estate planning including asset preservation planning.
THERE IS NO FEE FOR THE INITIAL CONSULTATION
