Question:

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I have not taken compensation for 16 years as agent under power of attorney for my mother because i wanted to be sure she had enough money. If she is near passing away may i take some compensation knowing that she has enough to cover expenses.

Response:

Perhaps a little, but don’t take too much. Most family members who act as agents under durable powers of attorney don’t demand or expect compensation. That doesn’t mean that they couldn’t receive it if that’s what they and the grantor of the power of attorney had in mind. But it’s not clear that you and your mother had such an expectation. In fact, your not taking payment over 16 years may well have created an expectation among other heirs that you would not be compensated. So, absent evidence of an agreement between your mother and you, it would be hard for you to receive much compensation for your role. And in terms of an agreement, one in writing is much stronger than one that’s completely oral. For instance, your mother suggesting that you compensate yourself in a conversation that no one else heard, even if if it happened, would be difficult to hang your hat on. In addition, be aware that any compensation you do receive must be reported as taxable income because it would be earned for the services you provided.

You might well ask what an agreement would look like since you were trying to achieve two goals: that you receive some compensation for your services and that your mother not run out of money. It could be a written agreement for your compensation with an annual writing by your mother stating how much she owes you for services to date. Then you could enforce it once it’s clear that your mother can afford to pay you. This can also be useful for Medicaid planning purposes. A simple payment when a parent moves to a nursing home would be considered a disqualifying transfer of assets, but paying of a loan is not a problem.

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