My 2 sister's who are POA plan to take money out of my Dad's account and put it in each siblings name. Is this legal?

The long and short of it is that they are stealing.

When my dad was diagnosed with Alz, we went to an elder care attorney, got all the assets together etc. Mom said everything was to be divided between my sister and I. Then life happened, the money has all been used for their care. Moral of the story - unless you're quite wealthy, leave the money alone because you never know what the folks will need for their care.

Does Dad have enough money to last him through the end, no matter how much care he needs? If it is possible he will ever need to Apply for Medicaid your sister's actions will come to light and cause serious problems for him qualifying.

What do they mean by "preserve his estate?" Preserve it for themselves? Have they stated an intention to share with you or other relatives? Are they saving that money to use for his care? If so, why not leave it in his name?

I think you and your sisters need to consult an attorney who specializes in Elder Law, and can advise them how best to legally manage his estate at this point. If they won't agree to this, go on your own, explain the situation, and ask for advice about preventing problems for your father.

The big problem is that distributions before death are very taxable if they exceed the gift limit of $14,000 per year.
The second problem is that large gifts can make you ineligible for Medicaid if you need it within five years.
It would be better for them to talk to a tax man first.

The ONLY purpose of PoA is to act in the grantor's (your Dad, in this case) best interests. Anything else is THEFT, a criminal offence. Your sisters' plan definitely does not qualify as appropriate. "Preserving his estate" - for whom? His beneficiaries after he's dead? How does that help him while he is alive? They would have to do some very fast talking to convince a judge that they were acting legally and honorably.

But, they could get away with this if no one ever checks up on them properly. If you are willing to act for your father, tell them upfront that what they are planning is illegal and wrong and you WILL pursue the matter if they attempt it. Refer them to the relevant laws. Get your hands on all documentation possible. Then keep an eye on them.

Plus there are the Medicaid issues, taxes, etc, which could put your father in a vulnerable position.

No, I don't believe their actions are legal.

With your dad's dementia, he may need long term care. If he runs out of money and needs to apply for Medicaid, this could be a real problem. Medicaid looks back 5 years. There are no Medicaid police, so no one is going to go after him. But, and this a big BUT, if money has been gifted away and not used for his care, he will not qualify for Medicaid. Then who's going to pay for his care? If the money is already spent, the kids would need to come up with a lot of money out of pocket. I am always amazed how people expect the state to pay for care of elderly and want to preserve the estate for themselves. This is the motivation behind what they are proposing. Shame on them. This is dad's money for his care.

It would make no sense for them to do this. If one of them needs to borrow some money from the estate, they can arrange to do that, and the money can be deducted from their share of the inheritance (if there is any). The trouble will come if your dad needs to apply for Medicaid. The loan would have to be repaid.

I see no purpose in taking a third of the money and setting it aside in children's accounts. It can set in your father's account just as comfortably. Did they mention why they wanted to do this?

My POA sisters want to put this money into each sibling's name, but, have asked everyone not to spend it until Dad's death. They feel that my Dad has enough money to last for 5 years at which time they expect to have him apply for Medicaid.
They are counting on the fact that the look back period is five years. I feel that this is cheating the system and risky because the laws may change and my Dad my need more money before the five years is up. There is no way to predict the future. I also do not want my Dad to go on Medicaid (which is welfare) unless he was absolutely out of money. A Tax Attormey has advised them and they all think this is a slick plan. I think it stinks.

It might be slick to the tax man, but I'm not sure it would to an attorney who knows the law better. It does stink.