As much as we all like to believe we are invincible, it’s a hard truth of life that we are not. What if an accident or illness left you unable to tell your doctors what kind of medical treatment you desire, or made it impossible to handle your finances? Medical and financial powers of attorney allow you to give a trusted person power to act for you until you are again capable of handling your affairs.
What Is a Power of Attorney?
A power of attorney is a legal document that gives a trusted person you choose the power to act in your place on your behalf. Should you become mentally incapacitated, you’ll need “durable” powers of attorney for medical care and finances. These documents are “durable” because they remain effective if you become incapacitated and are unable to handle matters on your own whereas other “non-durable” powers of attorney automatically end if the person who makes them loses mental capacity.
With a valid power of attorney, the trusted person you name will be legally permitted to take care of important matters for you — for example, paying your bills, managing your investments, or directing your medical care — if you are unable to do so yourself.
The small investment in these documents pay large dividends over time.
If you do not have durable powers of attorney and you become unable to handle your own affairs, your loved ones may have to go to court to get the authority to help you. This process can be a lengthy, costly and emotional one.
To cover financial and medical/health care issues you’ll need two separate documents.
What is a Medical Power of Attorney?
A medical power of attorney or “durable health care power of attorney” is a health care directive that allows you to appoint a trusted person (or “attorney-in-fact” or “agent”) to oversee your medical care and make health care decisions for you in the event that you cannot do so yourself. It also states your desire to receive or not receive certain care.
Your health care agent will work with doctors and other health care providers to make sure you get the kind of medical care you wish to receive. Your agent is legally bound to follow your treatment preferences, to the extent that he/she is aware of them, when arranging for your care.
A living will is another type of health care directive that is limited to deathbed concerns, and is used to declare your desire to not have certain life-prolonging measures if there’s no hope of recovery, for example, in the event of brain death or terminal illness.
A durable power of attorney for healthcare, on the other hand, covers all health care decisions, and lasts only as long as you are incapable of making decisions for yourself. For example, if you are under anesthesia and incapable of making a medical decision, your agent may make it for you. However, you can set out specific provisions in the Power of Attorney telling your agent how you would like them to act in regards to deathbed issues.
What is a Financial Power of Attorney?
A financial power of attorney is a document that gives a trusted person (your “attorney-in-fact” or “agent”) the authority to handle financial transactions on your behalf. Some financial powers of attorney are very limited and used for single transactions, such as selling a car or purchasing real estate.
A “general” power of attorney; however, is a very powerful, comprehensive document that essentially allows the person you choose to step into your shoes and act as you to address your financial matters. A general power of attorney that permits your agent to manage your financial concerns while you are incapacitated is called a “durable power of attorney for finances.”
With such a power of attorney, your agent can handle a multitude of tasks ranging from sorting through your mail and depositing your Social Security checks, to more complex ones like watching over your retirement accounts and other investments, or filing your tax returns.
Choosing Your Agent
Who should you choose as your healthcare power of attorney agent? Someone you trust. Yes, that’s in bold and underlined. If I could, I’d underline that sentence a few more times. These documents are very powerful. They allow the person you’ve chosen to essentially be you to act on your behalf. It is instrumental that the agent you chose be highly trustworthy. It’s vital that your agent acts on your behalf in accordance with your wishes. Once you’ve made your decision and created the appropriate documents, you’ll want to sit down with your agent and explain exactly what you’d like done in certain circumstances. This way there will be no misunderstanding of your desires if and when your agent is called upon to act on your behalf.
If you know you need to create a living will and/or powers of attorney, I encourage you to begin thinking of trustworthy people who might fulfill the role of your agent. Should you need an estate planning attorney to assist you in creating these documents, keep me in mind as I near the mid-January formal opening of my completely virtual legal office. I would be honored to assist you.