Financial Powers of Attorney

Financial Powers of Attorney are utilized to name an agent to handle your assets while you are alive only if you can’t handle them yourself.  They eliminate the need of someone having to go to the courthouse to have you declared “unable to manage your affairs” and to have a guardian appointed over your finances and the guardian has to post a bond and deal with the Clerk of Court.  Everyone should have a Financial Power of Attorney.  Most lawyers draw these documents but not all of these documents are drawn exactly the same. 

In Robert Whitt’s practice, he normally will add language to a Financial Power of Attorney that allows the agent to gift assets out of the principal’s name in order to protect assets in the event that the principal is placed into a skilled nursing bed.  The Financial Power of Attorney document is used as a crisis tool to try to protect assets at the last minute if an individual is placed into a skilled nursing bed and needs to apply for Medicaid.  The Financial Power of Attorney is the first line of defense for protecting assets that are in a client’s name prior to making an application for Medicaid benefits. 

             In 2018, the North Carolina legislature rewrote the Financial Power of Attorney statute. This change made it far more difficult for an attorney to allow unlimited gifting to occur using the Power of Attorney.  This is because the new statute makes gifting somewhat restrictive and extra language needs to be added to a Power of Attorney to get around the restriction and the statute.  If an attorney does not practice elder law but draws Powers of Attorney, they may not be aware of this issue.  It is very important to have your Financial Power of Attorney prepared by an attorney who practices elder law and Medicaid planning if you desire to have unrestrictive gifting language which will allow the document to serve as a tool for protecting assets in a crisis. 

It is always a good idea to have an elder law attorney review a clients existing Financial Power of Attorney to determine if the language needs to be amended to allow broader gifting to occur and not restrictive gifting.  This makes the document a very important part of the asset protection process.