Medicaid is a useful resource for paying for the great expense of long-term care. Only the truly needy qualify; strict Medicaid rules dictate asset and income thresholds, along with penalties for certain transfers.  In addition to the traditional criminal penalties that come with Medicaid fraud, there may be a finding of unjust enrichment in civil court.

An Oregon court recently issued an opinion regarding Medicaid fraud accountability and repercussions. The key players in this case were Larisa’s Home Care LLC, an adult foster care provider (the facility); Prichard, the resident; and Gardener, Prichard’s son and power of attorney.

Prichard was a resident of the facility. Her son, and power of attorney, applied for Medicaid benefits on her behalf and Prichard was approved. These benefits allowed her to receive services from the facility at a discounted rate. Unbeknownst to Prichard, her son had made fraudulent claims on her Medicaid application. Prichard’s son had been transferring funds from his mother, as her power of attorney, to himself over several years, yet stated on her Medicaid application that she had not made any transfers within the look-back period. Upon learning this information, the facility sought equitable relief for the difference between the Medicaid rate and the private pay rate from Prichard’s estate.

Folks with dementia who have to be moved from one environment to another can sometimes experience stress and anxiety, termed “transfer trauma.”  The extent of the transfer trauma can vary among individuals.  For some, it can be brief, mild, or non-existent.  In others, the trauma is extensive and intense.  The more extreme cases usually involve someone with early stages of dementia who is moving from the long-time family home into a new environment. 

When planning for the future, each of us would prefer to retain some semblance of power over the assets we leave to our loved ones. But how do we help our clients control how things are divvied up or used after their deaths? One answer is to include a power of appointment in their planning documents.

Power of Appointments, Generally

A power of appointment is simply a way for the client (the “Donor”) to designate a particular someone (the “Donee”) to direct the client’s assets (the “appointive property”) to the people or entities (the “Appointees”) that the client has selected; in the ways that they have instituted; by means that they have espoused. Further, it is also a way to provide a trusted Donee with the power to select Appointees of their own choosing. A power of appointment may be created as a present power or as a conditional power.