For long-term care planning, a standard or general Power of Attorney form may be insufficient. To effectively navigate Medicaid‘s strict financial rules, you need a “Medicaid-Compliant” Durable Power of Attorney.
When creating a Durable Power of Attorney (POA), one should anticipate the need for nursing home care in the future, which includes the possibility that Medicaid will be needed. To transfer assets, gift assets, and apply for Medicaid on your behalf, your Attorney-in-Fact will need to have specific authority and powers:
Asset Transfer Powers: Unlimited authority to gift, transfer assets, and establish trusts, which is necessary to meet Medicaid‘s 5-year look-back period.
Application Rights: Specific permission to access financial records, sign Medicaid applications, and communicate with state agencies on the principal’s behalf.
Durability: The document must remain valid if the principal becomes mentally or physically incapacitated.
Power of Attorney documents should not be confused with a Living Will (also known as an Advance Directive). A Living Will is a legal document directing one’s treatment decisions at the end of life, such as whether tube feeding is wanted or whether one should be kept on life support. It should also be noted that Financial and Medical Powers of Attorney documents are usually separate. Medical Power of Attorney documents only pertain to health care decisions and medical decisions and Durable Power of Attorney documents only pertain to financial decisions. In Missouri, it is suggested that once a Medical Power of Attorney has been signed, it should be provided to the principal’s health care providers and health care facilities for continuity of medical care.
As stated above, a standard Power of Attorney form downloaded from the internet may not contain the proper terms for Medicaid, and it also may not comply properly with state laws. In Missouri, Durable Powers of Attorney must be notarized in front of a notary public, and Health Care Powers of Attorney require a notary and an additional two witnesses. For this reason, it is recommended to seek legal advice from an estate planning or elder law attorney. Attorneys’ offices will often have a notary and witnesses on staff.