In 2016 the Connecticut legislature adopted a new law known as the Connecticut Uniform Power of Attorney Act that made significant changes to the power of attorney. The goal was both to improve the old Statutory Power of Attorney Act and give warning to people about powers that can be used for good and for bad. For example, if a family member is given the power to give away your assets, that could be used wisely, or could be used to take away your assets to your detriment to benefit the person who is power of attorney. These powers to change where your assets go during lifetime, or after your death, are known to attorneys as the “hot powers.” In order to give people pause to think before giving such powers, the law requires that the person making the power of attorney put their initials next to each specific authority.
A person who cannot do those things for essential selfcare due to physical or mental deficiencies is what the Public Policy Institute of AARP calls self-neglect. Some of the signs of elder self-neglect are poor personal hygiene, bedsores or skin rashes, untreated injuries or infections, weight loss and dehydration or malnutrition. Still other signs are unpaid bills, unsanitary or unsafe living conditions, poor personal hygiene, lack of food in the home, and improper or dirty clothing..
Medicaid and estate planning are two areas of law that intersect with each other in the lives of many families. Simple estate planning can include wills, trusts, healthcare directives and HIPAA forms. More complex estate planning can include trusts to avoid substantial state and federal inheritance taxes for those families who have assets that exceed the exemptions. It can also include trusts to handle assets for children or grandchildren who are too young and inexperienced to responsibly handle money or other assets. Everyone needs this type of planning.
Many people know that Medicare will pay for rehabilitation services in a nursing home if the patient has had a three day inpatient admission to a hospital. A physician must order the care in a nursing home and it must be related to the condition that resulted in the hospital services. Practically speaking, the care must only be available on an inpatient basis. The person must need to receive seven days a week of nursing home care, or skilled therapy five days a week or some combination seven days a week. This is the normal rehabilitation families know about.
A familiar question is “Can I make gifts to my children?” Or, “Can I give my house to my kids to protect it?” An initial question that should be asked is whether you have enough to live on and do those things in life that you want to do, because if you give away assets to your kids, they may not be there when you want it. Not because your kids are untrustworthy, but because bad things can happen to good kids. They can get sick, they can die, they can get divorced, and they might even get sued for a car accident. They cannot prevent any of those bad things from happening. So unless you have a fortune big enough not to worry about your own needs, gifting should only be done after considering your own needs first. After that you need to consider what assets should be gifted, the tax ramifications, and what happens should you need long term care.
Huge numbers of married people have worked hard and saved money through the years in IRA’s, 401Ks, or 403B’s to use in their retirement. IRS and tax consultants call these “Qualified” assets because they qualify under the tax laws to defer income taxes until funds are taken out of the “Qualified” account. But if one spouse’s health declines to the point where long term care is needed, either at home or in an institution, prior planning can make all the difference in the world between losing most of that nest egg to long term care, or preserving it for the healthy spouse to live on.