Powers of attorney should often be drafted with as much flexibility as possible to allow for what is known as crisis planning. Although you might want to have restrictions on your power of attorney, such as when a person can take the action on your behalf, flexibility provides you with the most opportunity to adapt and have your agent be able to step in in a variety of situations. Imagine this crisis planning scenario.
If you had to enter a nursing home unexpectedly and you don’t have appropriate monthly income to pay for it or long term health care insurance, you will need a flexible power of attorney document so that your appointed agent, also known as an attorney in fact, can handle your financial decisions. This situation could represent a significant departure from your current financial management.
This is extremely important because nursing home care can cost upwards of thousands of dollars per month and many people underestimate the length of their stay inside a nursing home. Furthermore, far too many people are under the impression that Medicaid will automatically step in and cover their bills or that Medicaid provides support for long-term care services. This is not the case.
The key to a properly drafted power of attorney document is to ensure that it is broad enough to avoid potential guardianship proceedings in the event that you need government assistance to pay your nursing home bills. It can be much more difficult to qualify for government benefits if a guardianship is in place. Make sure that you work directly with an experienced estate planning lawyer to discuss your options when creating important documents like a power of attorney.
If you have an older power of attorney document that needs to be revoked or when you’re getting ready to create this tool for the very first time, our Pasadena, California estate planning lawyers are here to guide you through the process and ensure that you’ve created a document that will give you peace of mind.