[WSBAPT] POA question

Wed Sep 27 12:22:14 PDT 2017

I'm dealing with a similar issue right now and figure it's better to
continue this old thread rather than start a new one, but the issues here
are a bit more complex. Hopefully someone can help me address the issues
present:

(1) Mom is the surviving trustor on a trust that impliedly became
irrevocable on her husband's passing (the Trust only provides for power to
revoke during the joint lifetimes of the Trustors). The only asset of the
trust is $180k in cash held in a checking account (screwy, yes, but thems
the reality of the situation). The Trust does not currently have a tax ID
number, so presumably the bank considers it revocable still, if that is
relevant to any potential avenues in addressing this situation...

(2) The marriage was a blended family and there are step-children involved.

(3) Mom is aged and wheelchair bound. She lives with daughter, who is named
to become co-trustee with one step-child upon mom being rendered
incompetent or upon death. Mom is still legally competent to act, however,
and is still serving as trustee.

(4) Mom wants to pay daughter for room and board (including home care,
because daughter quit her job to help mom).

(5) Mom and daughter are both concerned that mom will eventually require
Medicaid, and so the five-year lookback is weighing heavily on this
situation.

As I see it, there are a slew of complexities here that really orbit around
two situations (1) how to safely make payments to daughter and (2) how to
do it in such a way as to not disqualify mom from medicaid when her assets
have been consumed. Here's where I'm at right now:

(A) If mom pays daughter, step-siblings may cry foul, so I am thinking that
a TEDRA Agreement might be the best option to establish an agreement
between family members for payment to daughter laying out exactly how much
daughter is going to be paid from the Trust.

(B) That gets into a question about whether such payments would then be
classified as payments to an employee of the Trust/Mom? And what about
income taxes/social security/medicare contributions for Daughter? My
thought is we could 1099 the Daughter and she would just have to report the
earnings on her tax return, correct? Anything that we could reasonably
exclude?

(C) Provided we can get over the potential family stumbling blocks and get
a TEDRA Agreement in place, and the tax questions can be settled
effectively, we have the Medicaid question. Is there a method of ensuring
that these payments to Daughter would not be seen by Medicaid as a gift or
otherwise as a disqualifying event? Do you think having a rental agreement
and some sort of 1099 paper trail would be enough?

Any and all thoughts are much appreciated, including noting things that I'm
potentially missing.

Best,
David J. Faber
Faber Feinson PLLC
210 Polk Street, Suite 1
Port Townsend, WA 98368
(360) 379-4110

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On Thu, Apr 7, 2016 at 11:09 AM, Sarah Jael Dion <sarah at dionlaw.com> wrote:

> Thanks all- I appreciate everyone's insight on this!
>
> Sarah Dion
>
> On Apr 7, 2016, at 9:33 AM, Marcus Fry <mfry at lyon-law.com> wrote:
>
> I wouldn’t bother with TEDRA.  RCW 11.94 has a mechanism and so do the new
> POA Act to obtain court approval of the proposed act.  I would definitely
> get court approval unless the POA has an alternate POA, then the current
> POA could decline to act with regard to the particular transaction, i.e.,
> negotiation and execution of room and board agreement, and the alternate
> POA could sign the agreement.
>
>
>
> Marcus J. Fry
>
> Lyon, Weigand & Gustafson, P.S.
> Adoption Attorney*
>
> P.O. Box 1689
> Yakima, Washington  98907
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> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.
> wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com>] *On Behalf Of *George
> Edensword-Breck
> *Sent:* Thursday, April 07, 2016 8:57 AM
> *To:* WSBA Probate & Trust Listserv
> *Subject:* Re: [WSBAPT] POA question
>
>
>
> You don’t indicate what other relatives are in the picture, but whether
> there are any or not, this seems like a good TEDRA action situation..
>
>
>
> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.
> wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com>] *On Behalf Of *Sarah
> Jael Dion
> *Sent:* Wednesday, April 06, 2016 2:32 PM
> *To:* WSBA Probate & Trust Listserv
> *Subject:* [WSBAPT] POA question
>
>
>
> Hello-
>
>
>
> Looking for practical, as well as legal, input on a situation.
>
>
>
> Acquaintance is POA for her incompetent stepfather. Acquaintance is moving
> into a larger home, which has extra room, and would like to move her
> stepfather in so he can be in closer contact with the family. She plans to
> charge him rent, but is nervous about doing so, because she would be
> writing the rent checks to herself.
>
>
>
> It seems to me that this must come up routinely- although it hasn’t with
> any of my clients. Can a family member who is the agent ethically charge
> rent to the person for whom she is the fiduciary? If so, what precautions
> are best taken?
>
>
>
> I’d appreciate any thoughts!
>
>
>
> Sarah Jael Dion
>
>
>
> Dion Law PLLC
>
> 206-550-4005 <(206)%20550-4005>
>
> sarah at dionlaw.com
>
> dionlaw.com
>
>
>
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