Whether planning for your elderly parents … or for your own future … there are certain legal documents that are crucial to have in place before you need them. Let’s begin with the most basic one … a Power of Attorney.
A “Power of Attorney” is a document that gives another person (your “agent”) the right to act on your behalf. They can access your bank accounts and make decisions in your best interests. Anyone 18 years or older is recommended to have a Power of Attorney in place. Before you create a Power of Attorney, however, you should be familiar with the laws in your own home state as laws differ from state to state.
According to the Uniform Law Commission, as of 2019, a total of 26 states have enacted versions of the Uniform Power of Attorney Act, including Alabama, Arkansas, Colorado, Connecticut, Georgia, Hawaii, Idaho, Iowa, Maine, Maryland, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming. Adoption of this legislation is pending in the District of Columbia, Massachusetts, Mississippi, and Tennessee.
There are three (3) types of Powers of Attorney:
- Specific Powers of Attorney are created for completing certain tasks such as paying bills, selling a house, etc. and are used on a temporary basis.
- General Powers of Attorney gives your agent broader authority and allows him/her to handle all your legal and financial affairs. While some states allow more than one person to be named as powers of attorney, it is highly recommended that it be only one person.
These documents end your agent’s authority at the time you become incapacitated.
- Durable Powers of Attorney may be limited … or may give your agent broad authority to handle all your legal and financial affairs. However, with this document, your agent keeps the authority even if you become physically or mentally incapacitated. Your family may not have to go before a court to intervene if you have a medical crisis or have severe cognitive decline such as Alzheimer’s or dementia.
Although a dementia diagnosis alone does not prevent a person from signing legal documents, an attorney cannot ethically let a person sign if they are not competent … or if they are not able to understand the implications of the document.
A court procedure known as a guardianship or conservatorship may be the only recourse available if a person is not competent to sign legal documents. The process can be expensive, time consuming and contested by family members who may not agree.
Oftentimes, a medical decision-making component is included in a durable Power of Attorney for healthcare reasons. This authority may be addressed in a separate document … a Medical Power of Attorney … used solely for health care … such as a healthcare surrogate designation or patient navigator.
Again, review your state laws carefully. Some states recognize “springing” durable Powers of Attorney. This means your agent can start using it ONLY when you are incapacitated. Some states do not … which means your agent can use the document on the day you sign the durable Power of Attorney. For elderly parents, a well-crafted Power of Attorney helps you (as a family caregiver/advocate) to help your elderly parents. For example, if your elderly parent(s) is applying for financial assistance or public assistance, such as Medicaid, or making sure your utilities stay on, or making sure your taxes are paid, you would not be able to do any of these things without the proper document(s) in place.
A daughter in charge of her mom’s care is unable to help advocate for her because legal documents had not been created before her mom’s medical diagnosis and her mom was physically unable to see an attorney before she became ill. It was extremely stressful for the daughter to get things accomplished without a Power of Attorney.
A patient’s cancer took her voice making it so that she could not verbalize her wishes. Without a voice, the patient could not put her adult daughter on the phone with insurance companies, etc. to authorize her daughter’s help on her behalf. It became frustrated for her daughter to pretend she was her mom … which is illegal and not advisable … and exposed her to potentially be financially responsible for her mom’s hospital bills.
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Plan ahead. Prepare these documents early … before you need them … and update them frequently. If you already have these documents in place, review them to ensure they are updated … especially if you have moved to a different state.
With thoughtful planning and an understanding of your agent’s authority, a Power of Attorney can be your new best friend and give you the peace of mind that your wishes will be honored and your best interests will be protected in times of crisis.