Power of Attorney Gift Rider
This entry was posted on November 10, 2014
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.
The Power of Attorney Form
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.
How Koldin Law Center, P.C., Can Help You With Your Power of Attorney Form
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 more than 50 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. To meet with us about your estate planning options, contact us for a free initial consultation.