Elder Law Survival Kit – Part 1

With so many television shows devoted to survival and doomsday preparation, I thought it appropriate to discuss what families should do to prepare for a long term care event. Given that one out of two people will either receive nursing home level care at home or in a facility, this kit may actually be worth having. Although I have to say that those bunkers look real cozy.

Here are the things that every family with an older or disabled member should have:

1. POWER OF ATTORNEY – It continues to amaze us how many people come to us with a family member in a rehab or nursing home without a valid Power of Attorney. Just as many come to us who are trying to use a Power of Attorney that is not valid or does not authorize the Agent to do what they want to do. People do not realize that Powers of Attorney are not created equal. Some are very high quality documents containing well thought-out and well-drafted provisions that permit an Agent to perform all of the tasks that may be required to care for his loved-one. Unfortunately, we see mostly off-the-shelf documents drawn by software engineers or by bored preparers who have little practical experience with using their documents. A good Power of Attorney is surprisingly simple and surprisingly complex at the same time. For example, Powers of Attorney are simple to execute. A Power of Attorney does NOT need a witness and does not need to be NOTARIZED to be valid! All that Pennsylvania law requires is a Notice signed by the principal (the person appointing the Agent) and an Acceptance by the Agent of the appointment.

That is not to say that a witness or notary is NEVER required. If you own a home, you may want to have a notary witness your signature. If your Agent ever wants to sell your home for you, the Power of Attorney must be recorded and a notary is required for this purpose. If you cannot sign your name and you either make an “X” or have someone else sign in your stead, then witnesses are required. Having said this, we have been fighting with banks so long about Powers of Attorney that we are starting to notarize and witness even though it is not required just to satisfy the banks. It does make it much more difficult to get a Power signed especially if the client is in a nursing home or hospital. This is another good reason why you should not wait to do a Power of Attorney.

And how about names? It seems like a simple thing to get the name right if it’s your name. I don’t know how often we see Powers of Attorney with a name that DOES NOT match the name on the Deed or bank account or insurance policy. And if the name don’t fit, your document will quit! It is quite common for people to draft Powers of Attorney without ever considering what their use will be and matching names accordingly.

And what if your local bank officer tells your Agent that you DO need a notary or witness on your Power of Attorney? Many banks do not really know the law and tell our clients that this or that is wrong with the document. You need to know that a bank cannot refuse to honor a Power of Attorney presented in good faith unless they have a reason to know it is being used improperly. They may validly ask for a Certification that the principal is still alive and hasn’t been declared incapacitated and that the power is still in full force and effect and that the copy before them is accurate – but that is all they can ask. If you supply this, they must honor the power or may be liable for the consequences. If those consequences are losing money on nursing care that could have been saved, then they usually act quickly to honor the Power.

And what about the basics such as when the Power is effective and who is serving as Agent? How should this be handled in a “good” Power of Attorney? There should be a provision that it is immediately valid and not a Power that “springs” into effect when the principal is incapacitated. Such a provision is simply a ticket to an expensive and time-consuming guardianship because that is what the bank or insurance company will ask for if this provision is in the document.

Secondly, the Power of Attorney should name ONE agent, not the whole family and not even two people. There should be no “successors” named unless you are looking to prove that the primary agent is incapacitated as well or “prove” they are unavailable by dealing with their doctor. If you want co-agents, do two powers of attorney permitting EITHER to act alone. Make sure the Power does not invalidate the other powers and you have the flexibility that each Agent may assist the other. If you don’t want one of the Agents to act unless the other is not able to do so, instruct your attorney to pocket the second Power and only release it should you or your first agent request her to do so.

Do not let the bank convince you to give up your original. These are valuable in that the original is necessary if the Power is recorded. The Certification permits the bank to use a copy because it states that a notary has reviewed the document and affirms that the copy provided is identical to the original. It is a good idea to have a Certificate of Agent done at the time your present the Power just so the bank has everything it requires to honor the request.

That is the simple part more or less. In the next part of our series on Elder Law Survival Kit, we will tackle the provisions that EVERY Power of Attorney should have and HOW these provisions should be placed in the document. If you have questions about this please call us as we would be happy to give you a sneak preview of the next installment.

mm About Leonard L. Shober

Leonard L. Shober has focused a quarter century on representing clients in their estates and tax matters. He began his legal career in an estate planning practice. However, his interest in taxes and estate planning led him to pursue a Master of Laws (LLM) from Temple which he completed in 1994. Len continued his estate and tax practice which ultimately led to a focus on the needs of the elderly and disabled. At Shober & Rock, Len focuses on elder law, tax and estate planning and estate and trust administration.

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