The importance of a good financial power of attorney in Medicaid planning

Attorney Robert Hidock: I wanted to talk about how important a power of attorney is. We see all different kinds here, and there's differences. Especially when you're getting into higher-end Medicaid and asset protection. It's very hard when you know you can help somebody and they don't have the power to do it. I was working on a qualified income trust for someone, Tom, on those enumerated powers that you initial on the power of attorney. There was an enumerated power that said, power to create qualified income trust. That box wasn't checked, nor any of the other boxes were checked.

I'm like, I'm sorry, I cannot create-- I can't do a QIT. The person comes back in a day with just that QIT box initialed. Same date on the power of attorney, clearly different handwriting. I'm like, I'm sorry, we can't accept that power of attorney. That initialing had to be done when mom could sign it. She's like, well, I'm not sure mom can sign it. I'm like, we can't go forward with a power of attorney, QIT. What I did is I created the power of the qualified income trust without the attorney, in fact, language on it. Hopefully mom can be able to sign that, or a spouse can sign for the applicant.

Attorney Tom Olsen: What we're saying is that we talk about we have all the Medicaid-compliant tools we need to protect your assets from the cost of a nursing home. The one thing that we do need is a good power of attorney, which really leads us to what we're trying to say here, and that is all power of attorneys are not the same. They range anywhere from one you buy off the office supply store shelf to an excellent one that Olsen Law Group does, which is a very good power of attorney. You got one that was apparently prepared somewhere else. It sounds like in a way it's a good one in the sense that they had the language that you needed, but for some reason, mom did not initial the box accepting or agreeing to that particular term.

Robert: Nor did she initial any of the boxes. Sometimes there's that catch-all at the bottom, yes but not this one. When someone gives us a power of attorney, I'm interpreting it, yes, I think this will work for Medicaid and this will work for the bank. Because if it's a qualified income trust, they're using their power of attorney to open the trust. That doesn't mean I'm the be-all end-all. The bank has to take it to legal department that has to clarify their approval. Then once it gets submitted to Medicaid, obviously Medicaid is looking at the same power of attorney. With our power of attorney, it is clearly spelled out. Anything that you could ever need for Medicaid is our subsection 32. There are no questions asked because it passes every single time.

Tom: Do you think that she got a good form from somewhere? Because the form sounds pretty good. Maybe she did buy it offline or somewhere. She just didn't properly fill it out. Do you think an attorney did that power of attorney for her and was just not paying attention and telling her, look, you need to initial all these spots?

Robert: I would hope she pulled it offline and just didn't have the knowledge to know that she needed to initial those and they were the most important ones.

Tom: Got it.