Reed: Additions to powers of attorney beyond statutory form

Sandra W. Reed
Sandra Reed

Trent’s father, Jack, is exhibiting signs of short-term memory loss on certain days, especially when he is tired. Other days, Jack seems to function normally. There is a history of dementia in the family.

Two years ago, Jack’s attorney assisted him in executing a statutory durable power of attorney following the form suggested in the Texas Estates Code. Does Jack’s memory loss signal a need to modify the power of attorney to include additional powers while Jack retains the capacity to make such a change?

Is the SDPOA Insufficient?

Elder law attorneys, Jennifer Coulter and Jessica Kludt, of the El Paso firm, Townsend Allala Coulter and Kludt, argue that, under certain circumstances, the Statutory Durable Power of Attorney (SDPOA) may not cover all the needs of a particular individual.

The Texas Estates Code does not invalidate a SDPOA that contains specific additions. Therefore, Coulter and Kludt recommend everyone consider their circumstances to determine if additional powers are needed.

Circumstances indicating need for additional powers

The Estates Code form of the SDPOA does not authorize the agent to create a trust. It may be advantageous for the agent to have that power, if, for example, Jack owns property in another state, but hasn’t put the property into a revocable trust to avoid an additional probate in the property’s location.

What if, after Jack is incompetent, a child or grandchild becomes disabled and is receiving Medicaid benefits? A special needs trust from Jack’s assets could benefit the child or grandchild, leaving Medicaid benefits intact. With the powers added to the POA, Trent could establish the trusts necessary to meet each of these needs.

Suppose, Jack’s diagnosis is early-stage Alzheimer’s with a prognosis for long-term care in five or six years. If the POA is expanded to give Trent the power to make gifts on Jack’s behalf, these gifts could be made prior to the five-year look back period and, thereby, preserve assets without delay in qualifying Jack for Medicaid.

Benefit of additional power over other means

Without the addition of powers, Trent may have to apply to the court for a guardianship of the estate. This process would take several months to complete and add significant expense.

Sandra W. Reed practices Elder Law in Somervell County, handling probating of estates, drafting of wills, trusts, powers of attorney and deeds as well as estate and Medicaid planning.  She lives on beautiful Chalk Mountain and can be reached at (254) 797-0211; (817) 946-2809 or at sreed@kbzlaw.com.