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What is Reasonable Compensation for an Agent Under a Power of Attorney?

  • March 3rd, 2017
Q
What is a reasonable amount of reimbursement for me as an agent under a power of attorney who is paying bills, picking up prescriptions, and going on doctor visits and trips to buy groceries for my elderly mother?
A

This is a difficult issue and depends in large part on whose eyes are doing the beholding. First, let’s be clear about terminology. It sounds like you're talking about compensation, not "reimbursement." This means that it is payment for services and it should be treated as taxable income. Second, who will be questioning the amount? Is it siblings who might think you’re taking too much of their rightful inheritance or the Medicaid agency, which may treat the payments as a transfer rather than payment for services? In either case, one question is what would it cost to hire someone else to perform the same services in your community. Unfortunately, this may be difficult to determine since there may be no service that does exactly what you describe, but you may be able to get some guidance at least for some of what you list. Then you may want to discount it, since many if not most family members provide these services at no charge.

If you’re concerned about other family members, it’s best to talk with them first and come to an agreement on the proper compensation. But the Medicaid agency may still object to the amount, arguing that there is no obligation on your mother’s part to make the payments in the absence of a service agreement. You may draw up a written agreement, but if you’re signing as both parties – on your mother’s behalf under the power of attorney and on your own as the service provider – it could appear a little self-serving. That said, it may be the best way to go. We’d recommend consulting with an elder law attorney in your community to see what works with the local Medicaid agency. To find an attorney near you, go here: http://www.elderlawanswers.com/elder-law-attorneys

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Hale Ball Carlson Baumgartner Murphy PLC
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Last Modified: 03/03/2017

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