Incapacity Planning

Question 1

Durable Power of Attorney for Healthcare

Answer 1

Attorney in fact to make decisions on behalf of the principle

• Medical decisions only
• Always springing
• drafted separately

Question 2

Non Tax related Powers

Answer 2

buy, sell, lease
collect from debtors 
operate the principles business
sue
refuse life prolonging procedures
etc

Question 3

Tax related Powers

Answer 3

power to make gifts to spouse (equalize estate)
power to make gifts to children/grandchildren (annual gift tax exclusion)
power to make living trusts for support
power to complete transfers to a living trust if principle becomes incompetent.
power to sign gift tax and income tax returns
power to exercise special power of appointment

Question 4

Powers that can’t be given

Answer 4

Power to execute or revoke a will

Power to execute a living will (right to die)

Question 5

Durable Power of attorney

Answer 5

Remain in effect throughout incapacity

**Springing- does not take effect until incapacity

Question 6

Non-Durable Power of Attorney

Answer 6

power ceases when no longer legally competent

Question 7

General Power of Attorney

Answer 7

deal with all assets and take action on behalf of principle

*limited or special…agent can perform certain tasks

Question 8

Advanced Medical Directive

Answer 8

living will
directs physician to discontinue life-saving procedures if terminal or vegetative state

DPOA _AHC - can appoint a surrogate attorney in fact to make healthcare decisions.

Question 9

Guardian

Answer 9

Guardian of a person- health and personal decisions

Conservator - guardian of property and financial decisons

Question 10

Revocable Living Trust

Answer 10

the most popular today
 reasons to establish:
 1. avoidance of probate
 2. provide a successor trustee in the event of legal incapacitation 
 3. management experience

Question 11

Medicaid Planning

Answer 11

<2000 o r > $500000 home equity
Will not qualify if assets given away within 5 years of nursing home need

Annuities - State must be remainder bene

Question 12

Special Needs Trust

Answer 12

• expenses approved by a trustee
• can protect against exploiting
• Can continue to receive public benefits (Medicaid, Section 8, SSI)
• Trust can only pay for supplemental needs not covered by programs.
• Can keep disabled person from living in poverty
• also common for someone disabled in an accident
• other people fund
• has a remainder bene

Question 13

Omnibus Budget Reconciliation Act

Answer 13

Allows individuals who are under 65, and disabled to transfer money to an Irrevocable OBRA payback trust and still qualify for Medicaid

State is entitled to assets in trust when person dies to payback Medicaid

• disabled person funds
• state is remainder bene