Jewish World Review June 23, 2008 / 20 Sivan 5768

Get an attorney to protect disabled brother

By Jan L. Warner & Jan Collins

http://www.JewishWorldReview.com | Q: I am 58 and have one disabled brother (age 48), who has always lived at home with our parents. Our father died last year and left everything to our mother, who, at 83, has been diagnosed with dementia. Although her doctor says she needs full-time care, he believes she has enough mental ability to sign a power of attorney and a will, but she won't. In fact, she has become very paranoid and refuses to sign a power of attorney for fear that I will take everything from her, ignoring the needs of my brother, who can't live alone.

Mom was recently committed by her physician when she threatened a nurse in his office. She is now being medicated properly, but the doctor says she must be placed in a nursing home. Since she has signed no power of attorney, I finally was forced to apply to our local probate court for conservatorship and guardianship over her.

At more than $5,600 monthly for a nursing home, her money and property will run out in short order, leaving my brother unprotected. I went to the probate court to inquire about ways to set aside funds for my brother, but I was told this could not be done. Mom owns a house worth $130,000. Her Social Security and Dad's retirement is $1,600 monthly. She is down to $55,000 in her accounts, still too much to qualify for benefits.

Without some planning, my brother will become a public charge. My wife has agreed for us to take care of him. I can't understand why the court won't help me. I don't want anything for myself.

A: People who have mental capacity — or their spouses and agents acting under durable powers of attorney with appropriate specific language — have the authority to change beneficiary designations, transfer assets, and use various estate-planning and Medicaid-planning techniques without court approval. However, when dealing with incapacitated people, courts are often asked to determine if, how and when an incapacitated person can transfer assets to qualify for Medicaid, which is what we assume you want to do for your mother in order to protect your brother's future.

There may be limited ways in which conservators can engage in some planning without court approval. For example, since conservators are charged with making prudent investments for their wards, should there be a Medicaid-planning technique that can be classified as a "prudent investment," this might be accomplished without judicial approval. Additionally, since some state laws allow a fiduciary to make purchases for the benefit of a ward without prior judicial approval, a conservator might be able to make a purchase that would also enhance a Medicaid planning strategy.

By and large, however, Medicaid planning requires prior judicial approval before implementation. Some courts have been very creative and helpful. For example, one California court authorized gifts by the guardian of an incapacitated person to family members in order to reduce estate taxes. And a New York court allowed the guardian to make gifts on behalf of an incapacitated institutionalized spouse to the community spouse in order to make the spouse in the nursing home eligible for Medicaid.

We believe that incapacitated people should have the same rights as people with capacity to take advantage of not only basic estate-planning opportunities but also Medicaid planning through a fiduciary, especially where, as here, your mother and father had been taking care of your disabled brother, and such a transfer would have been made by a reasonably prudent person with capacity to understand the situation.

Taking the NextStep: We suggest that you contact an experienced elder-law attorney, who can explain your case to the court. This is a time for effective "lawyering." And for our readers who have not yet faced this situation, we urge you to make sure you have appropriate durable powers of attorney that will allow trusted agents to make these decisions for you if you become incapacitated — without the necessity of court intervention.