BE CAREFUL TO WHOM YOU GRANT POWER OF ATTORNEY

By: BENJAMIN D. ECKMAN, ESQ.
Elder Law Attorney

On October 22, 2013, the Superior Court of New Jersey, Appellate Division ruled that a father who granted his son power of attorney and subsequently gifted dad’s money to himself, would not allow the father to qualify for the undue hardship waiver when applying for Medicaid.

The court’s ruling in R.P. v. Division of Medical Assistance and Health Services, highlights the importance of having a power of attorney, selecting an agent that you trust, and insuring the agent acts in your best interest and does not engage in self dealing.

In August 2006, R.P., then eighty years old, was placed into a private nursing home. R.P. gave his son, James, a power of attorney. In March 2007, James sold R.P.’s home, netting approximately $150,000. Between April 2006 and November 2008, James transferred $182,354.06 from R.P.’s bank account to his own bank account and stopped paying dad’s nursing home care. As a result, R.P. was evicted and forced to enter a public nursing home.

When the Medicaid application was made, the Board of Social Services properly treated R.P.’s transfer of assets to James as a gift, triggering a penalty period. The court held that R.P. by virtue of granting power of attorney to James, made the gifts himself and therefore failed to satisfy the criteria to establish a hardship waiver.

Based on this case, it is critical that when executing a power of attorney, you must guarantee that the agent to whom the power of attorney is directed is prevented from engaging in self dealing. To that end, please contact the Law Firm Benjamin Eckman, Esq. to properly prepare a power of attorney with the appropriate language, thus preventing the outcome discussed above. For a more comprehensive discussion about powers of attorney, please click here.

 

Benjamin D. Eckman, Esq. concentrates his practice on Elder Law & Estate Planning. Elder law is intended to broadly assist “extended living”. An elder law practitioner provides the legal information necessary for persons whose lives will extend or have already extended beyond the time when all children are usually out of the house and when regular employment ceases. After the elder law attorney and client complete their work, legal documents have been drafted, tax considerations have been analyzed, and a plan to protect the elder’s estate has been implemented.

Benjamin D. Eckman’s practice focuses on Estate Planning & Elder Law – legal issues facing senior citizens. Benjamin D. Eckman received his Bachelor’s Degree in Business/Accounting from Touro College and his law degree from Seton Hall University School of Law. He is a member of the New York State Bar Association, the New Jersey State Bar Association, the National Academy of Elder Law Attorneys, the Elder Law Section and Real Property, Probate and Trust Section of the New Jersey State Bar Association, the Union County Bar Association, Passaic County Bar Association and the Bergen County Bar Association. He can be reached at (973) 709-0909, (908) 206-1000 or (201) 263-9161.