Power of Attorney, A Way to Honor Loved Ones?

Should I Have Power of Attorney?

Spouse Power of Attorney

Serving with a Power of Attorney is a way to honor your loved one.  Are you qualified? Are you ready?

You have been asked to serve as an agent in a power of attorney document.  First, congratulations on the incredible trust placed in you.  While it is an extreme honor that someone has chosen you to make decisions on his/her behalf if they are no longer able to do so, it is a great responsibility and should not be entered into lightly. Second, you should know exactly what you are agreeing to before you accept the position.  For example, do you know the answers to these questions?

  • What is a Power of Attorney?
  • What does a Power of Attorney document do?
  • When does a Power of Attorney start?
  • When does a Power of Attorney stop?
  • What if there is more than one Power of Attorney?
  • Should I agree to serve using a Power of Attorney?

What is a Power of Attorney?

Although there are many possible iterations and specific situational documents, these are the two most common:

Statutory Durable Power of Attorney:

A Statutory Durable Power of Attorney is a document that names a person or person to make financial decisions or make business decisions for someone who cannot do so on their own.  This could be a person who is incapacitated due to illness, dementia, accident or another life-changing event that renders a person incapacitated.

Medical Power of Attorney:

A Medical Power of Attorney is a document that names a person or persons to make medical decisions or healthcare decisions for someone who cannot do so on their own.  This could be a person who is incapacitated due to illness, dementia, accident or another life-changing event that renders a person incapacitated.

What does a Power of Attorney Do?

The Statutory Durable Power of Attorney gives the agent the authority to act on behalf of the individual who granted it.  If you are named in the document, there will be a list of powers you have, which can include:  Real property transactions; Tangible personal property transactions; Stock and bond transactions; commodity and option transactions; banking and other financial institution transactions (generally the agent is prohibited from changing beneficiaries on annuities or life insurance policies); Estate, trust and other beneficiary transactions; Claims and litigation; Personal and family maintenance; Benefits from social security, Medicare, Medicaid or other governmental programs or civil or military service; Retirement plan transactions (generally the agent is prohibited from changing beneficiary designations); Tax matters; and Digital assets and the content of electronic communication.

The Medical Power of Attorney (which will include a HIPAA release to provide access to medical records) gives the agent the authority to make all healthcare decision on behalf of the person who granted it.  If you are named in the document, you will be able to make a broad range of medical and healthcare decisions, including consenting to treatments, refusing to consent to treatment and even withdrawing or withholding life sustaining treatment.  Consent to abortion is not included and certain mental health treatment is not included, but there are some provisions concerning mental health that can be addressed in a different document.

When does a Power of Attorney Start?

A Statutory Durable Power of Attorney may become effective immediately, on a specific date or upon disability or incapacity of the person who grants it.

If you are named in a Statutory Durable Power of Attorney, read the provision in the document regarding when it becomes effective.  If it becomes effective immediately, or on a specific date, it is simple to know when it starts.  If it becomes effective upon disability or incapacity, this is a sample of the language it will include:

“I shall be considered disabled or incapacitated for purposes of this power of attorney if a physician certifies in writing at a date later than the date this power of attorney is executed that, based on the physician’s medical examination of me, I am mentally incapable of managing my financial affairs. I authorize the physician who examines me for this purpose to disclose my physical or mental condition to another person for purposes of this power of attorney.

A third party who accepts this power of attorney is fully protected from any action taken under this power of attorney that is based on the determination made by a physician of my disability or incapacity. After having been certified as being incapable of managing my financial affairs, if a physician certifies in writing at such later date that, based upon such physician’s medical examination of me, I have regained the mental capacity to manage my financial affairs, then this power of attorney shall no longer be effective, and it shall become effective again only if a physician certifies in writing at a date later than the date I regained capacity that, based on the physician’s medical examination of me, I am mentally incapable of managing my financial affairs.”

A Medical Power of Attorney becomes effective when the person’s doctor certifies in writing that the person lacks the competence to make health care decisions.

Further, the document will have language similar to the following to assist in the process:

“In determining whether I am incapacitated, all individually identifiable health information and medical records shall be released to the person who is nominated as my agent hereunder, including any written opinion relating to my incapacity that the person nominated as my agent may have requested. This release authority applies to any information governed by HIPAA and applies even if that person has not yet begun serving as my agent.”

When does a Power of Attorney Stop?

Your Power of Attorney ends when:

  • The person who named you revokes the powers.  This can only happen if the person has capacity to make that decision.
  • The person who named you no longer needs a person to act on his/her behalf.  If the person was declared incapacitated by a physician, this will require a certification of capacity by a physician.
  • The person who named you dies.  You cannot act on behalf of a person who is not living.
  • There is legal action revoking your power of attorney.  If you are found to be in breach of your fiduciary duties or otherwise in violation of the trust placed in you, you may be removed by the courts as Power of Attorney.

What if there is more than one Power of Attorney?

A person can only have one valid Statutory Durable Power of Attorney or Medical Power of Attorney.  If, for example, a person who has capacity to do so, executes a new Power of Attorney, the previous Power of Attorney is revoked.  There will be language in the new document that clarifies this.

Should I agree to serve as Power of Attorney?

A Power of Attorney is a tremendous obligation.  Make sure you are up to the task before you agree to serve.   Here are some things to ask yourself and some things to consider before you agree:

Should I be named in a Statutory Durable Power of Attorney?

Daughter Power of Attorney

Are you willing to make tough financial decisions if you have Power of Attorney?

  1. Are you willing to make difficult financial decisions if necessary?
  2. Do you have the emotional capacity to endure the anger of the person who no longer has capacity but is unwilling to voluntarily relinquish control of his/her finances?
  3. Will other interested parties or family members be suspicious of your motives and can you withstand this criticism?
  4. Are you willing and able to put the best interest of the person who has named you Power of Attorney ahead of your own financial interests?
  5. Do you have the capability to manage these particular finances?  (If it is a complicated estate, do you have the business acumen and understanding to take it on?)
  6. Do you have a strong financial history yourself?

If you answered “no” to any of these  or if you have any hesitation, you may wish to decline to serve.  You can simply let the person know that you appreciate their confidence in you, but you are not able to serve in this capacity.

Should I be named in a Medical Power of Attorney?

Son is Medical Power of Attorney

Can you be emotionally strong in a medical crisis?

  1. Are you emotionally strong enough to make tough decisions, including life and death decisions?  Can you do this even if you are grieving?
  2. Are you able to make decisions under pressure, including pressure from other people who might not agree with you?
  3. Can you drop everything to make medical decisions in a crisis?
  4. If there is a crisis, can you take the time off from your other obligations (family, employment) to be available to make medical decisions for weeks or even months at a time?
  5. Am I confident I would be able to make the same decision the person who chose me would make?
  6. If I am not sure what the person who chose me would want, am I confident I can live whatever decision I make?

If you answered “no” to any of these questions, or if you have any hesitation, you may wish to decline to serve.  You can simply let the person know that although you deeply appreciate the consideration, that you are not comfortable in the role. 

Risk vs. Reward: Power of Attorney

Having said all of that, if you do decide to serve using a Power of Attorney, know that although it is a weighty responsibility, it can be an incredibly rewarding experience.  If it is for a parent, you can have the unique opportunity to give back to the person who gave you so much.  If it is for a spouse, you can truly demonstrate your ability to love and care for him/her in “sickness and in health.”  If it is for a friend or other family member, you can honor your relationship by doing your very best to handle things the way he/she wants things handled.

Above all else, please know it is a personal decision that only you can make.  If you ever need any assistance or just need us to answer a question for you, please do not hesitate to call our law office and speak to an estate planning attorney today.

Legal Services

Attorney Bob Leonard

Attorney Brady Odom

 

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