Q: How do I ensure that I have legal authority to act on the behalf of my elderly parent should the need arise?
A: The legal and financial aspects of caring for a relative can be disillusioning, especially if you don't have the knowledge or power to make the right decisions. You may be inundated by vague or contradictory advice, confused by a maze of bureaucratic hurdles, and frustrated by an inability to act at precisely the time you need to.
Durable Power of Attorney
In order to make most decisions on your loved one's behalf, you must be given the legal power to do so. The simplest and most effective way to do this is with Durable Powers of Attorney. A durable power of attorney is a document your relative executes (while competent to do so), that gives you (the agent) specific legal powers to act on his or her (the principal's) behalf. The term "durable" means it stays in effect if the principal no longer has legal capacity to execute such documents.
Durable Powers of Attorney (DPOA's) come in two varieties: medical and financial. A Medical Power of Attorney, also called a Healthcare Directive, allows an agent to make medical decisions on behalf of the principal. These can include authorizing a treatment, hiring or firing a physician, or hiring a personal attendant for home care. The document is only useful if it is accepted by your relative's physicians and medical facilities, and allows them to release information to you and accept your decisions. A related document is a Living Will which contains your relative's specific wishes for sustaining or terminating life-sustaining treatment.
Financial Power of Attorney
A Financial Power of Attorney is more broad- it allows the agent to act for the principal in many legal and financial activities. Examples are transferring money, filing tax returns, selling assets, or accessing information on behalf of the principal. As with the Healthcare directive, it is only useful if the institution or person you are presenting it to accepts it and releases information to you or allows you to act on your relative's behalf. So, if at all possible, you should know that the document will be acceptable before you need to use it.
Another important legal designation is power to act on trust assets. Assets owned by a trust are controlled by the Trustee of that trust. If your relative is the sole trustee of a trust, but is legally incompetent to act in that role, the successor trustee named in the trust must step in. In order to have the power to act on those assets, you should be legally named the successor trustee of the trust.
If your relative has not assigned these legal powers to anyone before becoming incompetent, you can still go to court to request a Conservatorship hearing. A court-appointed conservator has legal rights similar to the agent of a durable power of attorney. However, petitioning the court to be appointed conservator can be time-consuming and expensive, so having a Durable Power of Attorney executed in advance is preferable.