It sounds like what you propose is not permitted under the provisions of the power of attorney. However, if everyone is in agreement, as a practical matter it may be possible and not be challenged. What you describe is not uncommon as a Medicaid-planning device and can have some tax benefits since you can deduct some of your parents’ medical expenses on your tax return. However, depending on the property it can have some adverse tax consequences as well, especially if any of the assets are highly appreciated. It also subjects the transferred assets to your creditors and to risk if you were to get divorced or pass away while holding the funds. Given what’s at stake, I strongly recommend that you and your family consult with an elder law attorney before implementing the plan.
For more on powers of attorney, click here.
For more on transferring assets to qualify for Medicaid, click here.