Question: My sister and I had been very concerned about our mother, now 83, continuing to live at her home alone since she has become forgetful and is not eating as she should. We thought it was a good idea for her to consider assisted living. After visiting several facilities, we found one she liked. What made it more attractive was the fact that the administrator told us that Mother’s stay would be tax deductible. Of all of the facilities, this was the only one that made this claim. Since she is paying income taxes on the interest, dividends, and pensions she is receiving, a deduction of $30,000 per year would help. Can you give me information or how we can find out how to take advantage of that tax deduction?

Answer: We don’t believe she can and, under the circumstances you describe, find the facility’s representation to be outrageous.

If your mother itemizes her deductions, she is entitled to deduct unreimbursed expenses for her medical care to the extent that these expenses exceed 7.5% of her adjusted gross income. For income tax purposes, “medical care” means amounts paid for (1) the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body; (2) transportation primarily for and necessary to medical care; (3) qualified long-term services; or (4) qualified insurance covering long-term care under a qualified insurance contract.

While “medical expenses” can also include up to $50 per night for lodging while away from home for medical care provided by a physician in a licensed medical care facility, “medical care” does not include custodial care, and an assisted living facility is not a “medical care facility.”

Since the facility has made this claim, rather than you researching the issue, we suggest that you ask the facility as part of the admission contract to provide your mother with an indemnification to the effect that if she can not deduct the monthly fee paid to the facility, the facility will reimburse her an amount equal to what her deduction would have been. If you receive this indemnification and like the facility, by all means admit your mother. On the other hand, if the administrator begins hedging, we suggest you look elsewhere because, in our view, false statements before admission can only mean problems later.

Question: I have been looking after my aunt, now 86, for the past six years. She has no other family. Although she has placed my name on all of her bank accounts, the house and her stocks are in her name. I took her to a lawyer last year to get a power of attorney so that, if she became unable to take care of her business, I would be able to handle matters. The lawyer filled in the blanks on a two page form my aunt signed, charged her $100, and told us that this general power of attorney was all we needed. After her stroke last month, no one would accept the power of attorney even though it had been recorded, and I was told it had expired. The lawyer now tells me that I will have to go to court to get appointed as my aunt’s conservator, and that he can help me. How can this be?

Answer: All powers of attorney terminate at the death of the person giving the power; however, a general power of attorney terminates at the incapacity of the principal, the precise time you need it most and the very contingency under which your aunt intended for you to have the authority to deal with her assets.

For this reason, all 50 states have enacted laws authorizing durable powers of attorney which specifically survive the incapacity of the principal. Most states require that specific language be included in the document to qualify it as “durable”. This language should be to the effect that the power of attorney will continue past the principal’s incapacity.

Bottom Line: Beware of lawyers or others who use or suggest pre-prepared forms and fill in the blanks documents. Durable powers of attorney should be drafted to meet the needs of the principal. That said, your only option is to seek the assistance of your local probate or surrogate court. We suggest that you select another lawyer as the one who prepared your aunt’s power of attorney has helped you enough.