Is POA on Checking Account Considered a Gift for Medicaid Purposes?

Question:

My two brothers and I are going to apply for medicaid for our 89 year old mom. One brother is on her checking account as POA. Is that ok?

Answer:

Titling a bank account as a POA (Power of Attorney) with a child means that the child has the power to access the account (to pay bills, etc) -- for the parent. As such, all of the account is deemed the parent’s money for Medicaid purposes. Adding a child as a POA does not constitute a gift of the underlying funds, so it does not trigger a penalty for Medicaid purposes.

Note that unlike titling a bank account with one child as joint owner (which can also give that child access to the funds), the child with the POA does not automatically receive the funds upon the parent’s death. The funds will pass by probate under the parent’s will, or if there is none, then according to state law (typically, equally among the children).

A good resource for this type of information is Medicaid Secrets.