Legal Checkup — Your Power of Attorney
This edition of the Koldin Report E-Newsletter continues a series on the importance of an annual legal checkup of your estate planning documents. Just the way you go to the doctor for an annual checkup, you should do a regular check up of your estate planning.
In this newsletter we discuss why your Power of Attorney should be reviewed on an ongoing basis. All prior newsletters are saved on our website. You can read them by clicking here.
At the initial appointment with our clients, the Koldin Law Center, P.C. reviews your current Will, Power of Attorney and Health Care Proxy.
Even our current clients who meet with us for file review appointments often discover that their current legal documents need to be updated to meet changes that have occurred in the lives of their families.
We also discuss what planning you have done in the event long term care becomes necessary either at home or at a nursing home.
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 costly and time consuming Guardianship proceeding may become necessary.
Have Your Children Grown Up?
Many new clients to our office don’t have a Power of Attorney. Those who do have a Power of Attorney often have appointed relatives and friends because their children were young at the time the document was prepared.
Most people would prefer to have their adult children handle their affairs if they become physically or mentally unable to do so.
Some couples may have named only their spouse and no alternate and may now want to add adult children as alternates to the spouse or as Co-Power of Attorney with the spouse.
Has Your Relationship Changed with Your Appointed Agents?
It is important that you fully trust and have full confidence in the person or people you select to serve as your Agent(s) under your Power of Attorney.
Your feelings about who you want to act as your Power of Attorney can change over time as your relationship with each of your children and grandchildren changes.
Also, there can be changes in the lives of your children and grandchildren such as disability, illness or financial problems which could change your feelings on who should serve as your Power of Attorney.
Do you Have a Gift Rider?
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 may be unable to withdraw funds for him/herself 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 for him/herself any accounts that are solely in the ill spouse’s name. The only alternative at that point would be to file a costly and time consuming guardianship proceeding.
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 allows an additional 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 and to allow continued support for the healthy spouse.
At the Koldin Law Center, P.C., located in East Syracuse, New York, we have over 50 years of experience helping individuals plan for immediate crisis and long term care. Our attorneys are available to discuss your estate planning options. We do not charge a fee for the initial consultation. We welcome your children, family attorney, accountant, and/or financial planner to be present at the initial consultation.
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 Koldin Law Center 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 Koldin Law Center 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