I had an lawyer that practices "elder law" create a durable power of attorney, for $800. He assured me it would allow me to create a Qualified Income Trust for my father. This DPOA does not specifically list anything about trust. I don't even see the word "trust" in the document. I don't need the QIT now. But my father has dementia, so when I do need it, he probably won't be able to sign a new one. What should I do?
2 Answers from Attorneys
The first thing you could do is have another estate planning attorney review the DPOA to confirm whether you are correct, that the power to create a trust is not expressed in the document. I would willing to review it for you at no charge if you would like. If your father is not legally competent to execute new DPOA and the existing one needs to be revised or replaced, then you will likely need to petition the court for guardianship.
Establishing a trust through a power of attorney is one of the "enumerated powers" provided for in Florida Statutes, Section 703.2202(1). The paragraph including that provision must be initialed by your father to be effective. The language for a qualified income trust should be something similar to the following:
Section 5.01 Trusts
_____My Agent may create and fund inter vivos trusts of any type, whether revocable or irrevocable, and whether or not I am a beneficiary.
_____With respect to any trust created by me or on my behalf, my Agent may amend, modify, revoke, or terminate the trust, but only if the trust instrument explicitly provides for amendment, modification, revocation, or termination by an Agent. Further, my Agent may add property to an existing or subsequently created trust, and accept transfers or distributions from any trustee of any trust, including any trust over which I have a right of receipt or withdrawal, whether as grantor, beneficiary, or otherwise.
_____Also, and without limiting the authority granted to my Agent in this Section, my Agent may:
(i) create and fund a sole-benefit trust in accordance with United States Code, Title 42, Section 1396p(c)(2)(B);
(ii) create and fund a self-settled special needs trust in accordance with United States Code, Title 42, Section 1396p(d)(4)(A);
(iii) create and fund a qualified income trust in accordance with United States Code, Title 42, Section 1396p(d)(4)(B) if such a trust should be deemed necessary to qualify me for Medicaid benefits, and make arrangements for the diversion of my income to such a trust as necessary to comply with applicable Medicaid rules and regulations, as are more particularly set forth in the Economic Self Sufficiency Manual Section 1840.0110;
(iv) sign all necessary documents to allow me to join any trust qualifying under United States Code, Title 42, Section 1396p(d)(4)(C) and transfer any portion of my assets to such trust; and
(v) create a trust for the care of my domestic pets in accordance with section 736.0408, Florida Statutes.
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