A power of attorney (POA) is an important legal document, one that all seniors should consider but many families ignore.
If you are worried about the health of a loved one and are concerned about their ability to make decisions for themselves, a POA can help. It will provide the able family member, known as the “agent,” with the right to make decisions for their spouse, parent, or grandparent, also known as the “principal,” when they are unable to do so.
Powers of attorney can vary by type and scope. It’s those differences that we’ll address here as we help you understand the basic steps involved in signing a POA.
Step 1: Understand the Scope and Type
There is no single one-size-fits-all power of attorney, and you don’t automatically lose all control of your own life when you sign on the dotted line. POAs are airtight legal documents that outline specific rights and periods of control, and they include aspects such as:
Durable vs Non-Durable POA
A durable power of attorney is active from the moment it is signed and remains active until the principal passes away or power is revoked. It does not end if they become incapacitated.
A non-durable POA is more limited and often used for temporary financial matters, such as the sale of a property. The rights of a non-durable POA also end when the principal becomes incapacitated.
Medical POA vs Financial POA
The scope of the POA is important and is something you can discuss with an attorney. They will determine whether a general or limited POA is best and can assign specific rights to the agent.
With a Medical Power of Attorney, these rights typically revolve around health care, medications, and other medical decisions. The agent can decide what type of medical care is provided and where it is provided.
With a financial power of attorney, they have access to bank accounts and are tasked with paying debts, covering healthcare costs, and assisting with other financial affairs.
Springing Power of Attorney
A springing POA takes effect on a specific date or when certain terms have been met. For instance, the principal may request that the POA activates only when they have been declared as medically incapacitated.
These POAs are accepted in most states but they are not without their problems. Doctors may be unwilling to declare that a person is unable to make decisions on their own, for instance. However, it provides the principal with some peace of mind, knowing that their affairs will be dealt with when the time is right and not a moment sooner.
Step 2: Speak with Loved Ones and Legal Experts
Speak with an elder law attorney to create a POA that reflects your needs and your wishes. Your loved ones should also be consulted, including adult children, aging parents, spouses, and anyone assigned as an executor or beneficiary on your will.
These people play an important role in your life and it’s essential that you keep them in the loop.
More importantly, you should speak with the agent first to make sure they are ready and willing. Just because they are close to you doesn’t mean they will be ready to assume responsibility for your life.
If you’re considering a POA for elderly parents, it’s important to approach the subject carefully, while still being realistic.
No one likes talking about wills and POAs. It’s morbid, and it’s uncomfortable, especially when you’re worried about deteriorating health. However, it’s also essential for the continued health and well-being of yourself and your family and becomes even more important if your parents own businesses or real estate.
You need to know who will make their financial decisions and health care decisions when they are no longer of sound mind. Will they get the medical treatment they need, will their bills and debts continued to be paid, and will their house be at risk?
Once your parents understand what’s at stake they should be willing to go through this process.
Step 3: Consider a Living Will
A living will can exist alongside a regular will and a power of attorney. It details an individual’s wishes with regards to healthcare and takes effect when they are incapacitated and unable to make decisions for themselves.
For instance, it may state that they do not wish to receive any end-of-life care or that they want to avoid life-saving treatments such as ventilators.
For instance, a patient with Alzheimer’s may state that they don’t want to be resuscitated if they are in the latter stages of the disease and contract an illness such as COVID-19, which could effectively prolong their suffering.
Step 4: Sign and Execute
The final step is to draft the power of attorney form and sign it. Requirements differ from state to state, but generally, it will need to be notarized or witnessed and signed by two individuals. The agent and principal also need to sign.
A power of attorney costs an average of around $400, but it depends on where you live, who you hire, and what the power of attorney document contains. Some websites let you create a POA online for less than $40, after which it will need to be notarized for about $50. This can be a cost-effective solution, but only if you know what you’re doing.
A POA is a very important document and it’s not something you should create or sign blindly. It’s important to work with an attorney so you can iron out the creases, ask questions specific to your situation, and ensure you get a document that is tailored to your needs.
Things to Consider Before Getting a Power of Attorney
- You can still make your own decisions and if these are made at the same time as the agent’s decisions, yours will take priority
- If family members are unable or unwilling, a close friend can also become the agent
- Limited power of attorneys give agents control over very specific and time-limited decisions, including property sales
- A POA can be revoked after providing the agent and other affected parties with a signed written document
- General power of attorneys provide more control over a longer period
- Non-durable POAs expire when the principal becomes incapacitated
- Durable POAs take effect immediately and only expire on death or revocation
- Medical POAs give the agent control over decisions such as senior living options (nursing homes, assisted living facilities) and treatments
- Financial POAs give the agent control over bank accounts, debts, bills, and investments