A power of attorney (POA) document legally enables a person (called the “principal”) to appoint a trusted relative or friend (called the “agent” or “attorney-in-fact”), to handle specific health care decisions or legal and financial responsibilities on their behalf.
Defining the Scope of POA
Power of attorney documents are crucial for enabling trustworthy family members to help manage seniors’ medical care, bills and legal affairs. The principal can specify what powers their agent has—whether broad or limited—when the document is created. This assistance is invaluable for an elder who becomes incapable of making informed decisions for themselves. However, POA is also useful for seniors who are still competent but simply need an extra set of hands and eyes to help manage social security benefits, pay bills, make long-term care decisions, etc.
Families should prepare these legal documents long before incapacitation is a factor. A simple accident or illness could suddenly leave a loved one incapacitated, but POA documents can allow agents to immediately step in and help manage the situation if they are written correctly. Without medical and financial POA, family members must go through a great deal of red tape and expense to obtain guardianship (sometimes called conservatorship) so they can make decisions on a loved one’s behalf. This includes healthcare decisions, especially regarding end-of-life care, long-term care decisions, Medicaid planning strategies and much more.
Drafting POA documents well in advance is also an important part of preparing for the possibility of Alzheimer’s disease or other forms of dementia. Most seniors do not receive a diagnosis of dementia until their condition has progressed significantly and they are already showing signs of serious cognitive impairment. Being proactive is crucial because a principal must be competent to establish a POA. Many families wait until it is too late to draft these documents, and those in the middle and later stages of dementia are typically mentally incapable of making legal decisions like appointing agents to act on their behalf.
Types of POA
A POA can be written to grant an agent the ability to act in very broad terms or to only take specific actions. When detailing the types of powers the agent holds, the principal can designate legal abilities in specific areas of interest. Although a general power of attorney document can incude a combination of powers, Medical POA and Financial POA are often prepared as separate legal documents.
POA for health care gives an agent the authority to make medical decisions on behalf of the principal. The healthcare agent has authorization to make a broad range of healthcare decisions ranging from treatment and surgical decisions to future long term care options, so it is important to communicate all advance health care directives with the POA. The healthcare agent is charged with carrying out any care decisions that have been specified in a DNR or Living Will.
POA for finances gives an agent the authority to make legal and financial decisions on behalf of the principal. An individual appointed as financial POA is authorized to act on behalf of the principal when conducting business, financial and legal affairs such as paying bills, conducting real estate transactions or signing legal contracts.
What Is a Durable Power of Attorney?
Whether creating a medical or financial POA, timing and a principal’s ability to make informed decisions are important factors. There are two ways of writing POA documents that affects when they become “active” and “inactive.” With a durable POA, the document becomes effective immediately once the principal signs it. The agent obtains the legal authority to make decisions about matters detailed in the document and maintains it whether or not the principal ever becomes incapacitated. A valid durable POA will remain in effect until the principal dies and is an invaluable legal tool for most seniors and their family caregivers.
What Is a Springing Power of Attorney?
On the other hand, a springing POA names an agent in advance but does not grant them legal authority for decision making until the principal becomes incapacitated. The difficulty with this type of POA is that the principal must be incredibly careful when specifying what type of event will allow the agent’s powers to “spring” into effect. If it isn’t crystal clear what kind of incapacitation triggers the POA, then the family may have to waste precious time going to court to determine if the principal meets the POA document’s conditions for incompetency and whether the agent is able to assume their duties. In most cases, the standard for triggering a springing POA requires a certification from at least one doctor regarding the principal’s lack of mental capacity.
What Is a Non-Durable Power of Attorney?
Less common in elder care legal planning is the non-durable POA or ordinary POA. This type of power of attorney takes effect immediately upon signing but does not remain in effect once the principal is deemed incompetent. This type of POA is usually used in business transactions and is meant to grant an agent temporary authority to sign financial or legal documents when the principal is unavailable.
What Kind of Power of Attorney Is Right for You?
People often balk at the thought of preparing and signing a power of attorney document. Some may feel frightened at the prospect of losing their independence, and some are afraid that the agent they appoint may not act in their best interests. It’s essential to choose an agent wisely and to discuss the scope of their ability to act on your behalf before drafting a POA.
An attorney can explain the different types of powers of attorney in greater detail and tailor any of these documents to fit a client’s unique situation, desires and comfort level. Keep in mind that POA documents can be revised or revoked at any time as long as the principal is still legally competent. It’s a good idea to periodically review all legal documents, including POAs, wills and advance directives to ensure they are still effective.
To learn more about power of attorney documents and other estate planning and legal matters, find a reputable elder law attorney in your area and make an appointment for a consultation.
Sources: Power of Attorney (https://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/power_of_attorney/); Durable Powers of Attorney (https://www.naela.org/Web/Consumers_Tab/Consumers_Library/Consumer_Brochures/Elder_Law_and_Special_Needs_Law_Topics/DPOA.aspx)