My brother and I share DPOA for my father. I noticed the verbiage states it will go into effect upon declaration of incompetence. What does that really mean?
How ‘incompetent’ does one have to be? Are we talking bed-ridden and incapacitated? Are we talking about general lack of ability to make financial decisions? I’m sure this is a lawyer-type question, but I’m certain someone “out there” has some insight.
My interest is because my brother and I would like to purchase a small, VERY modest residence using trust funds so I can relocate w/my husband and continue the 24/7 care I provide. (Husband is 300 miles away....) is this possible?? Renting seems such an enormous money pit, buying w/intention to resell after use just seems more logical in order to preserve dad’s money. Thoughts?
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POA goes into effect when the person is no longer mentally competent. It ends at death. I believe a doctor must sign off on this judgement of incompetence, it can’t be just hearsay. And, as POA, you and your brother must keep all receipts to prove his money was spent on him.
How does it work to purchase so it is in his name not ours. Again, to be re-sold when that time comes. Temporary. He would have to do all the physical signings,etc. and we would not? Is there a way we can do that for him?
Many financial power of attorney forms are written with guidelines for how competency can be determined. If you read the forms your dad signed, it may help you. If your dad is still legally competent, he can sign a very narrow power of attorney authorizing someone to complete the purchase of property transaction for him. That is very common. I've done that myself when I couldn't attend a closing on a property.
A consultation with a lawyer would be a good idea. And if you think he will need Medicaid help before 2023, I would really talk to an estate planning attorney with a specialty in Medicaid law.
I do not think that would constitute grounds for having him declared incompetent.
If, on the other hand, you haven't discussed it with your father, why not give that a go? If he agrees then it's plain sailing. Make very sure that you can resell any property you buy at short notice.
I hope you're taking *all* of the costs of property buying, ownership and resale into account when you compare it with rentals. You may find that buying short-term would be more trouble than it's worth.
..........sounds so underhanded... not the case at all
Mum is DPOA for friends who are both mentally alert, but overwhelmed by physical decline.
My brother enacted POA for Dad 3.5 years ago when Dad has a stroke. Dad has had a full recovery, but db still acts as POA for taxes and a few other things. Dad is aware of this and is happy to have someone else handle things.
In your case, if Dad is on the record of saying No do not spend my funds to buy a house, then you would have a challenge convincing anyone that you have Dads best interests at heart. POA is supposed to act on the person’s behalf. There are some expenses that you can be reimbursed for, but I doubt a house or housing costs are included.
Depending on the level of care Dad needs, he may need 24/7 care in home or in a facility. How can you provide 24/7 care from a different house?
https://www.agingcare.com/articles/personal-care-agreements-compensate-family-caregivers-181562.htm
As for making financial decisions using a loved one's finances, a good lawyer will typically state that money has to be readily available for the care of that person. A Will or Trust documents (if done in a detailed manner) often sheds light on what can or can't be done by the POA on behalf of the creator of the Will or Trust. Once my dad moved into nursing care (by that time, my mom was deceased), we were allowed and encouraged to sell my dad's residence; however, the money was still his and had to be easily accessible should he need it for medical or other needs.
Having DPOA allows one to avoid court costs and hassles to get guardianship and conservatorship (one for care, including medical, the other for financial concerns.)
If the person in question is clinically determined to be incompetent mentally, DPOA can more that likely be used - ask the attorney who drew up the documents (or another Elder Care attorney if the original is no longer available.) Some are "springing" which is slightly different and comes into effect when deemed incompetent. Not sure how this differs from a non-springing one.
Best to consult legal advice if there is/are questions! But the main point here is DPOA helps one avoid courts, saving a lot of time, money and hassle!
The goal is to have my husband (who presently is behind in No Ca) join me here, and will participate in my fathers’ care. A night person will be hired, so I could retreat to a separate residence @ night. I am now giving 24/7 care, but hope to whittle that down to 12/7. Renting seems like tossing money to the wind, buying (meager) seems at least to be an investment/ securing of funds. Maybe just succumbing to renting will have to do.
Im not interested in conservatorship, dad is far from that at this point. I was just wondering if there was a certain criteria that must be met in order for DPOA to go into effect.
Anyway. Didn't find what I was looking for exactly, but there were some points of interest which lead me to think that most of what you want to know *should* be explained in the DPOA document itself.
Several pro formas, for example, do specify the right to buy and sell real estate on the principal's behalf - does yours?
They are very very hot on attorneys not profiting in any way, on pain of death, pretty much (I exaggerate slightly); so anything you do must be of demonstrable benefit to your father. Substantial savings in care costs could be of benefit to your father, of course; but you would need to have all the numbers down in black and white and be able to prove same.
All of the information I could find about declarations of mental incapacity related to conservatorship applications in court, so that's no good. Are there no instructions or notes or guidance in your documents? If the work was done by an attorney, is there someone you could just call up and ask?
Although you did post what his condition is, I will say that If one is physically impaired, but still mentally competent, then one could likely use medical POA to help assist with medical care and be allowed to discuss condition and treatment. In this case, I would have to say no, DPOA for financial concerns would not take effect yet.
In your case, it is questionable. We had already done the MPOA/DPOA/transfer of condo from joint to just mom when dad was declining. Many years later, when she was showing signs of dementia (short term memory going!), we had to do some over. The attorney managed to get her to understand enough that we proceeded. She was still okay to be on her own for a while, but shortly thereafter I took over her bills and payments as she was making mistakes, using the DPOA (ours doesn't specifically say anything.) We were joint on her account already, but used the DPOA to help wherever needed (most bills the address change was easy - they don't care where they send the bills so long as they get paid!)
One thing that was done during the second round was to put the condo under life estate (upon death, all remaining trust funds and the condo would revert to the trustees - no probate court required.) This was fine, except that when we really had to find a MC place, selling it while she is still alive was complicated and would require some expensive cap gains! The flip side is things were going bad (heating system, glass, etc) and just taxes plus condo fees were costing 14k/year! So we sold it after fixing everything and now have to figure out all the cap gains! YUCK!
IF an attorney could agree that dad is competent, you *might* be able to buy using the trust and KEEP the place under trust for him. LEGAL advice would be best because every state has different rules for competence, use of the funds, and putting the home under trust for dad. Absolutely do not buy in your name! As others noted, that is considered gifting, so there would be tax consequences AND it could impede Medicaid if you ever need that!
Usually attorneys will give you a one hour consult for free - just draw up any and all questions you have ahead of time to make the best use of the hour! If possible, use the attorney who drew it up (if not Elder Care, it might be better to go to one who is instead.) Also explain his condition (can certainly relate to agree or understand one minute and not the next! FUN stuff!!! not.)
Some individuals who have had the POA's drawn up by an attorney may have the document written so that the authority to act is immediate. Again, check the document to see what triggers the authority.
Also just because a person has poor judgement it does not mean they are incompetent. We all can make poor decisions.