In these uncertain times, it’s more important than ever to have your legal, financial and medical ducks in a row. Sadly, when serious illness strikes it is usually quite rapid and often unexpected. In these times, however, we do have forewarning that we are all at risk of contracting COVID-19, the coronavirus.
If you have not yet named someone with Medical Power of Attorney, stop procrastinating and get this crucial planning in place now.
What is a Medical Power of Attorney?
It’s easy to focus most of the estate planning attention on the will and distribution of assets. However, a power of attorney is often as important as a will.
Naming a person to take on the role of Power of Attorney is not easy. For some families, it can hang up the entire estate planning process.
Forbes’ article, “9 Things You Need To Know About Power Of Attorney,” reminds us that it’s an important decision and not one that should be taken lightly. Let’s look at what you need to know to get your POA right.
The durable power of attorney is a means of naming a person who can represent another in all legal and financial matters, while they are alive and well, as well as when they are incapacitated. It is a legal document that needs careful consideration.
The power of attorney gives a representative or an agent the legal right to conduct financial affairs for another individual. A healthcare power of attorney gives an agent the ability to make medical decisions for another person. Both can be crafted by an estate planning attorney to give complete and wide-ranging decision making powers, or to be more targeted.
The Aitken (SC) Standard’s recent article, “The durable power of attorney,” explains that there are three different types of powers of attorney: nondurable, springing and durable.
In many families, it’s easier to figure out the ‘who gets what’ part of an estate plan than it is to decide which person should be power of attorney. Which adult child can handle finances, which one is better with decisions during a crisis?
Making the decision about which family member will take on the responsibility of power of attorney may be a little easier, if you have a clear understanding of what the role entails. Your estate planning attorney has seen every possible family dynamic and will be able to help you work through this decision.
Considerable’s recent article, “How to assign power of attorney without sparking a family feud,” gives us some idea how the power of attorney can work within a family and among siblings.
Having a durable power of attorney in place makes sense for some people. If you unexpectedly became ill or incapacitated, this would allow someone to take over your finances, including paying bills, checking on investments and managing the business side of your life.
A power of attorney is a legal document that lets an individual name another person or a financial institution to handle financial transactions for another person. The person who is given power of attorney, who becomes the individual’s “agent,” has a lot of responsibility, says WMUR’s recent article, “Why you need a financial durable power of attorney.” When there is no power of attorney in place, the spouse or family will need to go to court, before they can act on their loved one’s behalf.
Whether you’re young, elderly, single or married, it’s a good idea for everyone to have a power of attorney. For married couples, while your spouse can usually take care of the basic finances, many financial transactions require both spouses’ signatures. For those assets in your name only, your spouse will have no access.
This is a cautionary tale about what can happen, when the wrong person is given power of attorney. The problem here is that a man changed his power of attorney without any review or oversight from any family members, including his own wife.
Why Dorothy Jorgenson’s husband changed his power of attorney just days before his death, is something that only he and the relative he named will ever know. However, the relative acted fast and took more than $70,000 from the couple’s joint bank account, says WPRI.com in the article, “Son questions power of attorney after mother's bank account is drained.”
"When I went to pick up a prescription for my mother, there was insufficient funds to pick up a prescription," Dorothy's son, Gene Weston, said. "I can’t believe that someone would do that to an elderly woman."
There are a number of different estate planning documents that are easily confused, including “Power of Attorney.” Let’s get a look at the different types of “Power of Attorney,” and what they do.
Of the estate planning documents, most people have heard of a will and some have a health care proxy. The Power of Attorney is effective while you are still living, and is also known as a “Durable Power of Attorney” because it is effective, or durable, even after you become incapacitated. Your will only becomes effective when you die.
The Times Herald says in the article “Powers of attorney good for life and beyond” that there are two general types of powers of attorney, one for financial matters and the other for health care matters. They shouldn’t be combined in a single document, because they have different legal requirements. Unless they say otherwise in the document, powers of attorney don’t expire until the creator does. However, there are a few powers in both financial and health care powers of attorney that can survive the person who created the document.
Don’t have a medical directive, or don’t remember the last time you reviewed it? That means it’s time. We never know when an emergency or sudden onset illness will strike.
The biggest problem with medical directives, is getting people to confront the concept of being incapacitated or near death. Once you get past the emotional response, then a clear head and rational thinking make taking care of these important documents easier. However, they have to be updated, just like your will.
Your medical directive sets out what kind of care you want, when you are near death. A health care power of attorney names a person who will be empowered to make medical decisions on your behalf, if you cannot. These are tough concepts to wrap your head around, but very necessary. Without them, family members and doctors won’t know what you want. However, is what you wanted at age 30, the same as what you want at age 80? Maybe not.
Not having a spouse makes it more important for singles to plan to protect themselves from a legal and financial standpoint.
Everyone should have a plan in place for incapacity, affirms fox5atlanta.com in a recent article, “Estate, emergency planning for single people.” This is especially true for singles. While married couples can usually rely on each other, or their adult children, in case of emergency, what happens to singles who don’t have family members? You need a backup plan and a backup person.
In many instances, singles don’t have a backup plan. If you are young and single, then you typically aren’t thinking about a worst-case scenario at all.
Many people have heard of Powers of Attorney, and now, during this time of unprecedented disaster and flood, these two documents are more important than ever. There are two Powers of Attorney – the Durable (Financial) Power of Attorney and the Medical Power of Attorney.
The Durable Power Attorney allows you to name someone as your “agent” who can act for you on any financial or other asset-related action that you have authorized. For example, you may have an elder parent who may have been evacuated from an assisted living facility and cannot access their bank accounts, or, you yourself may have been evacuated and the last thing on your mind is how to pay certain bills. With a Durable Power of Attorney in place, the person you name as your agent can act for you and alleviate that pressure, so that you can focus on you and your family’s recovery.
A Medical Power of Attorney works in a similar manner. A Medical Power of Attorney allows you to name someone as your “agent” to make medical decisions for you. For example, say you were injured while evacuating or in a car wreck and could not make medical decisions for yourself. By nominating an agent, that person could make decisions regarding your treatment. Conversely, if you have an elder parent, they could name you as their agent and you could make decisions regarding their treatment. Having a Medical Power of Attorney may relieve your caregivers and loved ones from some of the hoops they would have to jump through to otherwise ensure that you would receive proper care.
Houston Estate Planning and Elder Law Attorney Blog