Shalloway and Shalloway, P.A.

Medicaid Planning for Individuals with Questionable Capacity

Chalkboard that reads medicaid

At a certain point in life, many individuals begrudgingly require the services of a skilled nursing facility. This can be especially true of individuals affected by dementia or other conditions that result in cognitive impairment. If such individuals prepare for this potential stage of life by executing estate planning documents (durable power of attorney, designation of healthcare surrogate, revocable living trust, etc.) while they are well, then the designated agent(s) of the ill individual will likely have the tools needed to perform Medicaid planning for their loved one. However, if the ill individual did not prepare such estate planning documents, Medicaid planning becomes more difficult without court involvement. Although individuals can always resort to becoming a guardian for their ill loved one in order to perform Medicaid planning, guardianship proceedings are costly and require on-going administration.

Many times, the issue of whether an individual has mental capacity to execute estate planning documents is quite nebulous as capacity in Florida is a matter of degree. The question is always “capacity to do what?” In Florida, the law holds that various actions require different amounts of capacity, depending upon the complexity of the action. Florida also recognizes that individuals’ capacity can fluctuate from day to day and from hour to hour. Often a person with poor cognitive capacity may have relatively lucid moments on any particular day. During one of those lucid moments, it is perfectly acceptable for an individual to execute an estate planning document.

For the capacity to execute a Durable Power of Attorney, an individual must recognize that there may be occasions when they are not capable of handling financial matters. It means the person must understand, in general terms, the extent of their wealth and that the individual knows their relatives, or others that they should consider to handle financial matters for them, and that they choose the person selected to act as an agent and understand the authority granted to such agent. On the other hand, the capacity to execute a Designation of Health Care Surrogate means the individual understands there may be occasions when they are not able to make health care decisions and the person is able to choose a proper surrogate that is able to act in their stead.

It is important to note that even when individuals have taken the time to prepare estate planning documents, sometimes the documents executed do not grant sufficient authority for the designated agent(s) to perform Medicaid planning on the ill individual’s behalf. If the ill individual still has mental capacity, then this is not a problem as the ill individual can execute new estate planning documents to confer the needed authority on the individual’s agent(s). But if the ill individual lacks capacity to execute new documents, then the designated agents may be unable to perform Medicaid planning or may be forced to perform sub-optimal Medicaid planning. Therefore, it is important to confer with an Elder Law attorney who can review estate planning documents to verify whether they grant the required authority to perform Medicaid planning.

Shalloway & Shalloway, P.A., is located in West Palm Beach, FL and serves clients in Palm Beach, Broward, Dade, Okeechobee, Martin and St. Lucie Counties.

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