If you have a parent or other loved one in a nursing home, and that person designates you as Power of Attorney (POA), it is very important that you understand your responsibilities. As POA, you are required to act on behalf of that person (known as the principal) in, among other things, paying the principal’s bills out of his/her assets.
A court proceeding involving Ernest Naylor (deceased), a former patient in a nursing home, is a case in point. Mr. Naylor designated his daughter as POA. She therefore had access to his financial assets (which included savings accounts, a checking account, stocks, properties, and motor vehicles) and she was responsible for paying his bills from those assets. Mr. Naylor’s daughter signed nursing home agreements stating that she would pay for her father’s care, utilizing his assets through her POA. However, his daughter did not pay the nursing home bills.
Consequently, the nursing home took Mr. Naylor’s daughter to court. The court ruled that the daughter was responsible for fulfilling her obligations as POA. The decision was appealed and the appeals court held that the lower court’s decision was correct. The moral of this story is that, as POA, you must fulfill your obligations and use the principal’s assets to pay his/her bills – even if that means selling off the principal’s property, stocks, and bonds or depleting savings and checking accounts.
One final point. As POA, your are not required to pay the principal’s bills out of your assets. Your authority under the POA terminates upon the principal’s death. However, even after the principal is deceased, to the extent that the principal’s assets exist, his/her bills must be paid out of those assets by his or her estate.
Getting Legal Help
Estate planning is complicated! Experienced Estate Planning Attorney Elga Goodman can help you and your family understand the various issues and make decisions that help ensure you and your loved ones will be well cared for and protected. Contact us today at 973-841-5111.
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