As POA, can I give gifts from Mom's estate?

1 answer | Last updated: Oct 28, 2016
Jodi4512 asked...

I am power of attorney for my mother who resides in a nursing home in TN. Can I give each of my children (I have 3), an $ 11,000 gift this year from my mother's money? She is paying for her nursing home care out of pocket and she has a sizable estate. I just do not want to get in trouble with a judge.

Expert Answers

Steve Weisman hosts the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including WABC in New York City and KRLA in Los Angeles. He is a practicing lawyer specializing in estate planning and is admitted to practice before the United States Supreme Court. He's a public speaker and commentator who has appeared on many radio and television shows throughout the country, and he's the legal editor of Talkers magazine, the preeminent trade publication of talk radio. His latest book is The Truth About Avoiding Scams.

Two primary issues are raised by your question. The first issue involves whether you have the authority to make the gifts you propose and the second is whether it is advisable to do so.

Durable Powers of Attorney documents are specifically tailored to the needs and desires of the person having one drafted on his or her behalf. The authority to make gifts varies considerably among Durable Powers of Attorney. So the first thing you need to do is to confirm that you have the authority to make the gifts that your propose. Many Durable Powers of Attorney do authorize gifts to family members. Often the amounts of gifts may be limited in the Durable Power of Attorney by the annual gift tax exemption amount of $13,000 per person.

In regard to the second consideration of whether it is advisable to make such gifts, you indicated that your mother has a "sizable estate." If your mother's estate is large enough to pay for her lifetime care in a nursing home, making gifts as you propose may be able to be done, consistent with her wishes without jeopardizing her financial well being. If, however, it can be anticipated that she may require Medicaid to pay for her nursing home costs in the future, you should be aware that any gifts made within five years of her applying for Medicaid can result in her disqualification for Medicaid benefits. In that case, gifting would not appear to be advisable.