Like most legal undertakings, setting up and enforcing Power Of Attorney (POA) documents can be a confusing process. Yet, these essential tools can help aging adults and their families gain peace of mind regarding future care.
Buckley Fricker, J.D., G.C.M., a geriatric care manager and president of Buckley's For Seniors, a companion care company for seniors, explains what POA documents can and cannot do, and the role these documents can play in end-of-life care planning.
The Two Types of POA
First, It's important to distinguish between the two main types of POA: healthcare and financial.
A healthcare POA gives a trustworthy friend or family member (called the agent) the ability to make healthcare decisions about a person's (called the principal) care if they are unable to do so. A financial POA gives an agent the ability to make financial decisions for a person if they are unable to do so.
For comparison purposes, Fricker likens healthcare POAs to guardianships and financial POAs to conservatorships. The primary difference between these two types of appointments is that, with a POA, an individual can decide in advance who they want their agent to be if they become incapable of making decisions for themselves. Conservators and guardians are court-appointed individuals.
What Can a POA Do?
The powers of an appointed agent are not limitless. Here are a few examples of the kinds of decisions each type of POA can make.
In the name of the principal, a healthcare agent can decide:
- What medical care they receive. (This is also dependent on the financial means of the person in need of care and the approval of the financial POA)
- Where they live
- What they eat
- Who bathes them
In the name of the principal, a financial agent can:
- Pay for health care and housing needs
- File taxes
- Pay bills
- Make investment decisions
The Uniform POA Act
Some states have adopted the recently-created, Uniform Power Of Attorney Act (UPOAA). This law sets up some basic ground rules for POA contracts. It determines which powers are included in the document by default, and which need to be explicitly addressed.
Among other things, the UPOAA mandates that:
- A POA is valid and durable as soon as it's signed. According to Fricker, this provision is important because it gives a principal the flexibility to decide how involved they want their agent to be while they are still in possession of their faculties. For example, a financial agent could handle the day-to-day tasks of paying bills and buying food, while the principal continues to make their own investment and major purchasing decisions.
- Compensation for decision-makers, gift-giving, and any beneficiary changes must be outlined in the POA document. One common question people have about POAs is whether or not someone is allowed to be paid for being making decisions for an injured loved one. Fricker says that any compensation must be outlined in the document ahead of time to be legal. She advises older adults who are considering appointing someone to have POA to think about including a provision that allows that person to be paid for their services. "Offering to pay a chosen POA is a way to incentivize them to take the extra time and care necessary to literally be in charge of another human being," she says.
- Third parties (banks, doctors, other family members) cannot be held accountable for upholding the decisions of a POA that appears legal and legitimate.
- A POA can't survive the death of the principal.
According to the Uniform Law Commission, as of 2016, a total of 21 states have enacted the Uniform Power of Attorney Act, including Alabama, Arkansas, Colorado, Connecticut, Hawaii, Idaho, Iowa, Maine, Maryland, Montana, Nebraska, Nevada, New Mexico, Ohio, Pennsylvania, South Carolina, Utah, Virginia, Washington, West Virginia and Wisconsin.
The Role of a Living Will
People who have gone through the process of appointing a healthcare POA should also consider drafting a living will.
A living will (also referred to as an advance health care directive) is a document that outlines how a person wants to receive end-of-life care. It handles issues like: Should a person who can no longer eat have a feeding tube inserted? Or, how long should a comatose individual be kept on life support?
Outside of providing a person's doctor with important information regarding their care, the advantage of a living will is that it takes the heat off of an appointed healthcare agent. "When it comes to life and death decisions, there's a huge burden on the healthcare POA," Fricker says, "It's very hard for someone who loves you to ‘decide to pull the plug' even if it's what you would have wanted."
Since a living will trumps the wishes of the healthcare POA, they may feel less "responsible" when difficult decisions need to be made. An attorney may suggest combining a healthcare POA and a living will into one document, called an Advance Medical Directive.