POA – Power of Attorney

POA – Power of Attorney

Power of Attorney, Explained

Has a parent or senior loved one asked you to handle a Power of Attorney (POA) for them? Have they assigned you as the executor of their estate? If so, you’re probably honored to be chosen for the trusted role. But do you really know what you’re taking on?  POAs cover a range of issues. 

Can you recognize when a loved one needs a POA?  How do you convince them it’s in their best interest? Are you ready to take the plunge and take on that responsibility?

It’s possible that you may find yourself forced into a situation that requires a POA for a loved one.  Have you ever had medical personnel tell you that they can’t give you any info about your loved one?  You can’t apply for any aid such as Veteran’s Aid or assisted-living or in-home care that may be needed for your relative. This may leave your hands tied at a very crucial time.

    You do NOT lose the right to make your own decisions. 

You have the same decision-making powers you had before you signed it.

 The Power of Attorney ends when you die.

A Power of Attorney (POA) is a legal document that allows you to designate someone else to make important decisions on your behalf. It’s often used by seniors, who are worried about being swindled for their money and assets – but they should be excited instead! A POA can help them protect everything from property ownership rights to distributing heirlooms and down the line.

A Power of Attorney is a document that can help you to protect your money and assets. It allows someone else to take care of things for you, such as a signature on contracts or other legal documents.

POAs cover a wide range of issues you may need to manage, such as selling real estate, buying a car, and managing everyday bills and financial transactions.  It allows your agent (the person you choose as the executor), among many things, to make calls to collect and gather information.  Your agent can speak for you, assist you in person, and sign for you when needed. You can also designate an alternate agent in the event the first person is unable to perform.

But because elder people often get taken advantage of by swindlers with POA’s, many seniors are scared even thinking about getting one themselves! That said- it really does put your needs first in case anything ever happened where the person who usually handles these matters isn’t there anymore.

As with many things, it can get a bit more complicated.  I strongly recommend that you have an attorney draw up your POAs.  Yes, you may want more than one.  Consider a Medical/Healthcare POA and a Financial POA.   These can be combined if you have an agent willing to serve in both areas.

If attorney fees are a concern, you can find examples online that will serve as a guide for your or your loved one’s situation. You can print and complete the form, but I strongly recommend you have an attorney review it.  Once it is finalized, your attorney will have you sign it and they will provide witness signatures for you.  Some attorneys are also Notaries or have one on staff to complete the document.

Medical/Healthcare POA

Perhaps you have a doctor or nurse or another medical expert in the family that you feel would make better decisions.  Here is a list of some of the decisions they may have to make:

  • Medical care including what hospital, clinic, pharmacy, or primary care doctor will be indicated for you
  • Treatments such as surgery, rehab, physical therapy, psychiatric, dietary, wound care, prescription medications
  • Where you will live such as residential long-term care, assisted living, memory care, and nursing homes
  • What you eat and who bathes you

Financial POA 

This type of POA may have a broad spectrum of responsibility and would be required to assist the Medical POA if a separate agent is assigned to each POA.  Below is a list of financial responsibilities that may be included:

  • Have access to financial accounts to assure you have your medical, housing, utility, transportation, insurance, and other bills paid
  • Arrange to have all your taxes filed and paid, including income and real estate taxes
  • Investment accounts should be monitored and sound decisions made on your behalf.  This may require your POA to work with other financial advisors
  • Collect your debts and manage any property you may own
  • Oversee your applications for Medicaid, supplemental insurance, veterans’ benefits, et cetera
  • Manage support of your family members such as spousal care, dependent children or parents

I had to send a copy of my father’s POA to the electric company for their records. It was only then that I could get the balance due, information on power usage, transfer the bill into my niece’s name when she moved in to housesit for the winter, and ultimately close the account when the house sold.

Springing Power POA

In Springing Power POA, the power of attorney is only effective if a qualified doctor determines that you are not able to make decisions for yourself. This could be about your finances or assets and even care in some cases – but with this agreement it’s ensured that those who have been chosen will make these choices on your behalf until such time as they no longer need them to do so.

It is recommended that you include the criteria for deciding who is involved in declaring that you are mentally incompetent.

Personally, I would not recommend this POA.  The determination of incompetency can be very controversial. Your family members may well disagree and cause emotional and financial distress.

Fiduciary Responsibility of Your Agent

Your choice of POA agent is crucial.  Under state laws, your agent cannot take your money for themselves, that means no fancy vacations for themselves. This is known as fiduciary responsibility. 

It may be necessary to have two agents serve at the same time.  POAs cover a range of issues.

You can also have a clause allowing for a secondary agent.  If anything goes wrong (illness, death, change in residence, or wants to stop serving) with the primary person chosen to execute the POA at any point in time, there’s always an emergency back up plan – which would take power away from anyone who becomes unavailable or unreliable. 

Now, this has a pro and a con, depending on the family.  Pro: It keeps one person from skimming from your accounts to their advantage.  Con:  These two may not agree on what is in your best interests.  This can inhibit crucial decision-making whether it’s financial or not.

Medicare Eligibility

I strongly advise you to use an attorney to create this clause. Medicare is very good at finding hidden funds and would not allow access because they know that some family members are only trying get their hands on these resources without paying them back!

You may not be eligible for Medicare even if you are unable to care for yourself because your family could have given away some of your assets. For example, they might do this so that the value would then count as theirs when it comes time to determine eligibility.

You must speak with an attorney about how best to protect these resources in order ensure access and coverage while also protecting them against penalties from programs such as Medicaid or social security disability insurance (SSDI).

 

It won’t be terribly expensive to create, but if you don’t have this clause it could get spendy.  I recommend creating trusts to protect your assets.  In some states, a trust must be in effect for a minimum number of years to protect the assets.  Example:  Minnesota requires assets to be in trust for five years to be protected. Plans are being made to change this to seven years.  

Be sure to check your state’s qualification guidelines. 

Do NOT send the original copy of a Power of Attorney to anyone.  Not even if they promise to send it back.

The way around this is to take the original to a bank and ask for an officer who is a Notary.  The Notary will copy the original after verifying your identification and then notarize the copy.  That notarized copy can be sent in place of the original.

 

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