The Importance of Power of Attorney

The Importance of Power of Attorney

The importance of power of attorney may become clear as a parent or loved one ages. It can be a struggle to balance respect for their autonomy and independence while protecting them from negative consequences of mental or physical health problems. A POA is one way to ensure that no matter what happens down the road, your loved one’s wishes will be prioritized.

A power of attorney grants the person or entity you designate to make decisions on your behalf, and it’s an important document for elderly parents.

For those who haven’t prepared a POA before, setting one up is fairly easy; they can save families from future complications when their loved ones are aging. You should execute this now rather than later even if your aged family member is still physically healthy–the sooner you prepare a POA with someone in mind, the better off everyone will be down the road!

What is a power of attorney?

1. General POA

A general power of attorney is comprehensive. It gives a senior’s agent the power to act on their behalf financially and legally. General POA can be used for healthy individuals who need or want help with financial or personal matters.

A POA is one of the most important documents for elderly parents and grandparents, but it’s one that many families haven’t prepared. Fortunately, setting up a power of attorney is fairly simple, and it can save you from future complications.

Executing a power of attorney is an important step to take sooner rather than later, even if your aging loved one is still physically and cognitively healthy.

This POA is sometimes called a financial power of attorney. It gives an agent power to:

  • — Sign documents on the senior’s behalf
  • –Manage bank accounts, deposit and withdraw funds
  • — Buy and sell property, real estate, and assets
  • — Trade and sell stock
  • –Pay bills and cash checks on the principal’s behalf
  • — Enter contracts for utilities and services like housekeeping or home health

2. Medical POA

A medical POA, also known as a health care proxy or health care agent, is someone who makes health care decisions for the principal if they’re incapacitated. It’s their job to ensure a senior’s wishes, which are stated in their advanced directive or living will. This ensures their wishes will be upheld in case of end-of-life care.

A medical POA only goes into effect when a senior is deemed incapacitated. The agent named is responsible for ensuring health providers follow instructions from the senior’s medical power of attorney documents. They also have authority over:

— Medical treatment
— Surgical procedures
— Feeding tubes and artificial hydration
— Organ donation
— Selection of health care or senior living facilities
— Release of medical records

3. Durable POA

A durable power of attorney allows the agent to make financial and medical decisions through all mental and physical circumstances unless the principal chooses to revoke it. “Aging parents or parents with significant health issues should have a durable power of attorney,” recommends Somita Basu, an estate planning lawyer in Santa Clara, California.

Even if the senior is in a coma, has experienced a significant cognitive decline from dementia, or has otherwise been deemed incapacitated, a durable power of attorney allows the agent to make decisions on their behalf. A non-durable power of attorney is void if the principal becomes mentally incapacitated, so it’s not recommended for dementia patients or seniors at risk of dementia.

4. Limited (special) POA

A limited power of attorney is exactly what it sounds like. A senior can give someone agency for a limited amount of time, which is generally stipulated in the document. For instance, a limited power of attorney could go into effect for a specific business transaction, such as a real estate sale.

5. Springing POA

A springing power of attorney is executed in advance, but it doesn’t go into effect until a senior receives a declaration of incapacity. Seniors who want to maintain autonomy as long as possible may prefer a springing power of attorney. However, this decision could lead to complications and delays down the road. Medical evaluations related to determining incompetence can be costly and time-consuming, and many are subject to legal conflicts.

Six common reasons for seniors to consider a POA

The importance of power of attorney is that it grants a chosen relative or friend the ability to make decisions when a parent or grandparent is either unwilling or unable. Here are a few reasons seniors may feel it’s time to set up a power of attorney.

1. Financial responsibilities
If your aging relative has a hard time staying on top of financial obligations, or they are in danger of overspending their savings, it may be time to establish a financial power of attorney. Check for overdue bills, duplicate checks, and fraudulent requests for funds.

2. Alzheimer’s disease
It’s vital to set up a durable power of attorney for an elderly parent with dementia before they experience significant cognitive decline since it can be complicated to execute legal documents once a senior is deemed mentally incapacitated.

3. Upcoming surgery
Invasive surgeries can lead to complications. A power of attorney ensures that a senior’s wishes will be respected in case of an emergency.

4. Planned travel
Sometimes, a POA is established out of convenience, rather than medical necessity. If seniors are traveling in retirement, they may want someone at home able to cash incoming checks and handle bills.

5. Medical diagnosis
A senior with a terminal diagnosis may want to establish a power of attorney to ensure their wishes are met when they become incapacitated or too sick to make health care decisions.

6. Unstable family relationships
It’s common for adult children to fight about a parent’s care, especially if they disagree about finances or end-of-life decisions. A power of attorney clearly designates who’s responsible for upholding the senior’s wishes and can block ill-intentioned family members from intervening.

How to select a POA agent for an elderly relative

Choosing an agent is often one of the most time-consuming parts of the process. The importance of power of attorney is for seniors to ensure their best interests, says Basu.  Here are five questions to consider when selecting an agent for a senior’s power of attorney:

1. Is a family member the best choice?
Many seniors select a relative as POA by default. This can cause conflict and may not be the best choice if family relationships are strained. An advisor, close friend, or professional proxy can all be safe alternatives.

2. Is there a knowledgeable option?
Someone familiar with medical procedures and treatments may be able to make better decisions as to medical power of attorney; someone with experience in accounting would be an ideal financial or general power of attorney.

3. Should power of attorney be split?
A senior can choose one agent for general power of attorney and another for medical power of attorney. Or they can choose multiple agents for both. If there are multiple agents who disagree, decisions could be delayed, however.

4. Will the agent be able to carry out the senior’s wishes?
The top responsibility of a POA is to comply with the senior’s directives. Sometimes, this is emotionally difficult. For example, a spouse may struggle with making the decision to end life support, even if it’s what their partner wanted.

5. Who does the senior trust?
A power of attorney agent should always put the needs and well-being of the senior first, no matter their own circumstances. Trust is imperative when selecting an agent.

Sometimes, adult children can feel hurt or jealous knowing their parent has given a sibling POA. A family eldercare planning meeting can be a forum to discuss choices and help people begin to accept them.

When and how should a senior set up a POA?

A senior’s wishes may not be known or respected without legal documentation, so it’s important to discuss a power of attorney with aging relatives.  The senior must be able to understand the POA to sign it.  Witnesses to the signatures are necessary.

Now is the time to talk about a POA

Experts recommend establishing a power of attorney for elderly parents before they need it, especially if they’ve received a concerning diagnosis. For example, patients diagnosed with early-stage dementia should set up a power of attorney before the disease progresses. In addition, suppose an aging relative is determined no longer competent to make their own decisions and doesn’t have a POA. In that case, family members face a complicated, expensive legal process to set up a conservatorship or guardianship.

Contact an elder law attorney

While many do-it-yourself power of attorney forms are available, it’s always a good idea to have a lawyer draft one tailored to your family’s needs because of the importance of power of attorney. There are many issues to consider, and in this case, one size doesn’t fit all. Here are four common scenarios an elder law attorney can help address:

Springing POA: 
If a power of attorney is springing, the method for determining incapacity must be spelled out in the document. Otherwise, the need to assess inability can cause delays and extra expenses.

Appointing a guardian: 
Usually, if guardianship proceedings become necessary, the court will appoint a guardian for a senior. However, if a lawyer has nominated a guardian in the durable power of attorney, then the court will usually honor that nomination.

Executing a power of attorney: 
Requirements for power of attorney differ between states. A local estate planning attorney or elder law attorney can execute the POA properly.

Bank acceptance: 
Due to potential legal consequences, some banks and other institutions are hesitant to accept a power of attorney, even if it’s executed correctly. Banks may have their standard power of attorney forms for you to sign. An elder law attorney can ensure that any documents you sign with a bank match the original power of attorney.


 

Leave a Reply

Your email address will not be published. Required fields are marked *