Can a person with Power of Attorney over their father’s finances withdraw a large sum of money from the father’s account to gift to the siblings?

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Can a person with Power of Attorney over their father’s finances withdraw a large sum of money from the father’s account to gift to the siblings?

This was the father’s wish before being incapacitated but they were never in writing. If this was done, the father would run out of money in 3 years and would have to be moved from his private care assisted living facility into a state run, state paid facility at that time. We know that this was the father’s wish but don’t know if it is legal since the state would have to be paying for his care when he is moved to his remaining money running out.

Asked on July 11, 2014 under Estate Planning, Illinois

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Unfortunately the transfer will be penalized.  Medicaid will look back for transfers made in the previous 60 months before the application for Medicaid is made.  Not all transfers will trigger the penalty. The penalty period will not begin until:

  • You move to a nursing home
  • You have spent down to the asset limit for Medicaid eligibility
  • You apply for Medicaid coverage and
  • You have been approved for coverage

Transferring assets will not always trigger the penalty. You are exempt if you make the transfer to:

  • A spouse
  • A blind or disabled child
  • A trust for the benefit of a blind or disabled child
  • A trust for the sole benefit of a disabled individual under age 65

The Medicaid applicant may transfer his or her home to:

  • The applicant's spouse
  • A child who is under age 21 or who is blind or disabled
  • Into a trust for the sole benefit of a disabled individual under age 65
  • A child of the applicant who lived in the house for at least two years and who provides care

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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