A power of attorney is a legal document that appoints someone to make legal and financial decisions for another person in the event of significant illness or injury. Annually over 8.3 million people need long-term care services, and that figure is only climbing. Appointing a power of attorney (POA) before any major health concerns arise is the best way to ensure your wishes are carried out if you become too ill to make decisions for yourself. This article will teach you about the different types of power of attorney and what to consider before signing.
What is a power of attorney?
A couple of different types of power of attorney will be covered in this article. Briefly, a power of attorney is a type of advanced directive that provides for an advocate of your choice to take care of specific needs once you’re no longer physically or mentally able to tend to those needs yourself. In assigning a power of attorney, you completely control exactly what matters the power of attorney is and is not allowed to handle on your behalf.
Power of attorney status can be revoked at any time, and at no point can a POA act against your expressed will or overrule your wishes when you are still able to functionally handle making those decisions. Many people in aging populations fear powers of attorney, claiming that this person will immediately take control of their healthcare decisions, making unwise and sometimes blatantly disrespectful or selfish decisions.
In fact, this isn’t a function of the power of attorney. As long as you are of sound mind and able to contribute to a conversation surrounding your healthcare or financial decisions, your desires outrank those of your power of attorney. The only time that this isn’t true is when you are incapable of either making those decisions or communicating your wishes, such as in the event of a coma or severe mental decline.
The good news is that recent studies show that those senior citizens with a durable power of attorney to advocate for them spend less time in the hospital than seniors without a POA.
Making your power of attorney paperwork as specific as possible, then, is important, as it is your best chance at outlining your end-of-life decisions, life-sustaining treatment, financial management, hospice care, end-of-life care, estate planning, and life-saving directives. This can include your desires for nursing care, be it in long-term or acute hospice care, living in a nursing home, and medication preferences.
Who needs a power of attorney?
Anyone can assign a power of attorney, so long as they are eighteen years of age or older and of sound mind. Therefore, you should strongly consider assigning the power of attorney, including speaking to the person you would like to maintain that role and communicating your wishes both verbally and in writing so that your desires are made clear as soon as possible. To complete power of attorney paperwork, all that’s needed is a written document signed by you with the signatures and dates of two witnesses. No notary public is necessary, though getting your forms notarized is encouraged to ensure that the forms are seen as legally binding by any party you encounter. Whether you’re young in years or young at heart, healthy as can be or dealing with illness, having a power of attorney assigned ensures that what you want for your personal and financial care will happen if you aren’t able to speak for yourself.
If you’re married, most medical facilities like hospitals and nursing homes will consider your spouse to be your power of attorney unless you specifically designate someone else to fulfill that role. It might seem obvious to make your spouse your primary advocate, but you should also consider other options that are available.
For example, while your spouse likely knows you the very best and wants the best for you, they may or may not be able to make more difficult decisions according to your wishes. This often occurs when a patient does not wish for extraordinary life-preserving measures, and a spouse cannot emotionally allow the natural processes to occur without medical intervention. Likewise, a spouse making difficult medical and financial decisions for you may experience an extraordinary amount of stress; they’re not only caring for you but experiencing a significant change in their routines and expectations. That’s a heavy emotional burden to process, and sometimes spouses agree to put those decisions in other advocates’ hands to avoid forcing each other to bear the emotional burden that comes with this level of advocacy.
If you do not have a POA and become so ill you’re unable to make your own financial or health decisions, a court may step in and assign a power of attorney for you. This appointed power of attorney may be a family member, a friend, a court-appointed guardian, or even a volunteer guardian who isn’t familiar with your wishes at all. When you’re court-ordered to a POA, not only is it more difficult for that advocate to adequately care for your personal, financial, and medical matters, but you may be in a position to not express your wants and needs at all. Waiting until the court declares that you must have a power of attorney takes the control out of your hands, where it belongs. It also increases your chances of being sick and for longer. For these reasons, it’s important to appoint your agent while you are of sound mind and body and are able to make your wishes for your future known.
Before you assign a general power of attorney, you should understand what kind of power of attorney you need. This can be tricky, as there are different types of power of attorney, each with its functions and limitations. Let’s explore those.
Power of attorney types
There are a couple of different types of power of attorney, and each has a specific, limited role in the patient’s life. In this document, we’ll look at non-durable powers of attorney, durable powers of attorney, springing powers of attorney, and special powers of attorney. Understanding the differences between the types of advocates available to you is instrumental in appointing the appropriate type of advocate.
In these instances, the “principal” would be you, the person assigning the power of attorney. The person you assign to be your advocate can be called the “agent” or the “attorney-in-fact.”
Non-durable powers of attorney
A non-durable power of attorney is an agent appointed for a set period of time or a set action. Unlike the other types of power of attorney, the non-durable power of attorney’s ability to act on your behalf only exists so long as you are also capable of making decisions for yourself. Once you are unable to make or communicate those decisions anymore, the non-durable power of attorney also has no ability to speak on your behalf. Instead, the non-durable power of attorney can act on your behalf to complete transactions during a specific period of time, or assist you in completing a set task.
Durable powers of attorney
A recent study shows that approximately 55% of senior citizens have been assigned durable power of attorney. Durable powers of attorney can be written to be “triggered” when you become incapacitated or unable to make decisions for yourself, as is the case for a springing power of attorney, or they can go into effect immediately. Which instance occurs depends on how the document is written.
Examples of circumstances which cause you to be incapacitated could include if you were in a traumatic accident and are unconscious, if you are in surgery and under anesthesia, or if you are not mentally capable of understanding the risks and benefits of medical treatment anymore. The durable power of attorney can be written so that the agent only becomes active or triggered when you are incapacitated in these ways. At any point before becoming incapacitated, the durable power of attorney cannot speak for you, make decisions for you, or overrule your decisions unless your paperwork specifically states that the agent can do these things beginning immediately upon signing.
The durable power of attorney only has the power you grant them. You can grant broad, all-encompassing power related to healthcare or finances or very specific, one-instance-only power. Anything you want the durable power of attorney to be able to handle should be clearly outlined in your paperwork, and any specific instructions should also be listed. The more specific you can be with what you want to be done and who should have the authorization to get those things done will help to ensure that your wishes aren’t overruled or overlooked.
Your durable POA has the authority to act on your behalf until your death. After death, your living will or other estate planning documents will be consulted, and your durable power of attorney will no longer have authority in decision-making.
You should choose a primary durable power of attorney to represent your wishes should you need an advocate, but you can also appoint a secondary power of attorney in case the primary is unable or unwilling to carry out your wishes. Anyone that you consider to assign this responsibility should, of course, be consulted and informed of the requirements and consequences of accepting such a position.
Financial durable power of attorney
The financial durable power of attorney can handle all of the financial decisions and transactions that you list in your power of attorney form. These can include the following:
- Banking Transactions: Depositing funds, withdrawing funds, paying bills, transferring money, opening and closing financial accounts, and accessing private safety boxes
- Government Benefits: Applying for government benefits for you and receiving and handling funds allocated through government benefits
- Investments: Handling all accounts, including investing, reinvesting, and withdrawing investment funds to pay for expenses
- Retirement Plan Management: Contributing to plans, changing or cancelling retirement plans, or withdrawing funds. This does not include changing the beneficiaries of retirement fund accounts
- Taxes: Filing taxes, paying taxes owed or receiving tax refunds, signing IRS documents
- Insurance: Applying for life, health, homeowners, and automotive insurance, paying premiums, and filing claims against insurance. This does not include cashing in policies or changing the beneficiary of such policies.
- Real Estate Management: Buying and selling a tangible personal property, leasing or renting property, making repairs on a property and paying taxes, utilities, etc on property owned or rented
- Personal Property: Storing, managing, selling, and buying personal property for you, including vehicles
- Legal Proceedings: Obtaining and paying for legal advice on your behalf, beginning or defending a legal action on your behalf
Financial powers of attorney cannot use their power or position to change your will, make “gifts” to themselves or others, or manage any accounts in ways that don’t directly benefit and serve you and your wishes. When choosing your power of attorney, though, you must be sure that your agent is not only trustworthy but a great listener – someone who respects your wishes and your values and whom you trust to manage your finances with integrity. While there are systems in place to ensure that powers of attorney don’t overstep this privilege, it’s always better and easier to be sure of your agent before assigning them than questioning them when something goes wrong.
Healthcare durable power of attorney
The healthcare durable power of attorney is appointed using similar paperwork and boundaries as the financial power of attorney. The agent that you choose to be your healthcare durable POA can be the same person as your financial durable power of attorney or someone else entirely.
The healthcare power of attorney is an agent who represents your healthcare wishes and acts on your behalf should you be unable to make those decisions for yourself. Just like with your financial power of attorney, you can be as specific or as broad with the responsibilities you assign to this agent as you want – if you leave the paperwork more open-ended, your power of attorney can make any health care decision necessary for you, like consenting to treatment and surgery, opting to hire nursing staff for in-home care or choosing to move to a nursing home, or even deciding whether or not to donate your organs. If you choose to be more limiting in the scope of responsibility, you can set forth exactly which decisions the POA can make, like choosing whether or not to utilize life support. In completing the power of attorney paperwork, you get to choose exactly which decisions the power of attorney is allowed to make.
Many people choose to write a living will rather than complete a power of attorney form, and you may be thinking that this is a better option for you as well. In fact, a living will is an entirely different document with a separate scope of responsibility. A living will is a document that requires no outside agent to implement; instead, it’s a set of directives for medical decisions that you desire. These can include any foreseeable decision, like whether or not you’d like life support.
A health care power of attorney is still needed for decisions you can’t predict or outline in a living will. Medical providers must have consent for treatments, including life-saving surgeries, and if consent isn’t expressed in a living will, the medical professionals will have to consult with a power of attorney to get that consent.
If you’re incapacitated, the power of attorney must follow your living will, though, so it’s worth the time to complete a living will in addition to assigning a health care power of attorney.
Springing power of attorney
The springing power of attorney can be durable or non-durable; what classifies an agent in this role is that their scope of responsibility is “triggered” at a certain time or after a specific event. This event can be your incapacitation or even travel outside the country.
Special powers of attorney
A special power of attorney, also called a limited power of attorney, appoints an agent for a narrow scope of responsibility. Oftentimes the special power of attorney is assigned to carry out a specific task, such as selling a property or making a one-time financial transaction. Special powers of attorney are a type of non-durable power of attorney.
The special power of attorney’s role is so limited that, in the event of your incapacitation, the agent wouldn’t be appropriate for handling long-term decisions. They could be responsible for the sale of a home or making a single deposit or withdrawal from a bank account, but they wouldn’t be able to handle financial decisions past a single task.
How to get a power of attorney
Power of attorney forms can easily be found online, and there is no need to use an attorney to complete one legally. However, power of attorney laws can be slightly different in every jurisdiction, so it’s critical that you seek guidance specific to your location before completing the form to ensure that it’s done correctly and will be legally recognized.
Complete all paperwork and then meet with a notary public and two witnesses to sign the document. You and your two witnesses should initial each page and sign the last. After those steps are completed, the document can be notarized, at which point it is officially ready for use.
Not every step listed here is required in every jurisdiction. Some locations may not require notarization; others may require only one witness or no witnesses. By taking extra precautions and soliciting those additional signatures, though, chances are you’ll cover the requirements of your jurisdiction.
If you are already living in a nursing home before you assign a power of attorney, it’s possible that the nursing home staff will have the power of attorney paperwork available for you to fill out. It’s not legally a requirement that patients of nursing homes assign a power of attorney, and nursing home staff cannot force any resident to sign the power of attorney paperwork. If you are living in a nursing home and are being pressured to complete power of attorney paperwork, especially if a staff member is pressuring you to assign them power of attorney, it’s imperative that you meet with an attorney as soon as possible to ensure that you and your assets are safe.
If you would feel more comfortable having an attorney assist you in completing the power of attorney paperwork, acquiring that legal counsel is certainly a possibility. An attorney can walk you through the process and explain the terms and responsibilities to ensure that your wishes are adequately represented in the paperwork.
Power of attorney paperwork costs
When you are completing the paperwork to assign a durable power of attorney, you will need to complete two separate documents – one for your financial power of attorney and the other for your healthcare power of attorney. Both sets of documents can be found online for free. The financial power of attorney documents can usually also be found in legal aid offices for free, and hospitals, doctors’ offices, and medical clinics can provide healthcare power of attorney paperwork for free as well.
Some states require that you file a copy of the power of attorney document with the local lands records office if the power of attorney will have the authority to manage real estate. Otherwise, having a copy of the power of attorney document in your at-home safe or in your attorney’s office is sufficient.
Alternatives to powers of attorney
In the event of your incapacitation to make informed decisions regarding your finances or health care, there is no alternative to the power of attorney. A living will or trust will not suffice if you are unable to speak for yourself, and there is no comparable alternative.
In fact, the power of attorney role is so important that, if you choose not to assign a power of attorney, your local court system will likely assign a power of attorney to you for the management of your financial and health care decisions. This assigned advocate is still responsible for using your assets wisely and following any living wills or trusts, but they may not know you well enough to advocate for your wishes in their entirety. For this reason, it’s encouraged that you take the time to assign a power of attorney before you are unable to make that decision for yourself.
Finding a lawyer
Most elder lawyers can help you to complete POA paperwork. Many attorneys will already have the paperwork available in their offices and can review it with you before completing the forms. A quick internet search will bring up the closest lawyers in your area and can also offer reviews and testimonials for the attorneys.
The most important factor to consider is your feeling safe and comfortable discussing your private matters with the attorney you find ethical and trustworthy.
Questions to ask
If you decide to use a lawyer to complete the forms, you should first interview several lawyers to determine which would be the best suited to help your family. Here is a list of questions you can ask potential lawyers to understand more about their background and how able they will be to help you through this process.
- Do you specialize in family law?
- How many years have you practiced family law?
- Will you personally handle this matter, or will an associate be assigned?
- Do you work on a retainer?
- Is there an hourly price in addition to the retainer?
- Are there any hidden costs, such as document storage fees?
- When can I expect to hear from you next?
- What are your preferred methods of communication?
- How can I contact you when I have questions?
- Generally, how long does it take for you to return calls?
- What do you expect from me as the client?
- What can I expect from you as my lawyer?
- What forms will I need in addition to a power of attorney to ensure that I am safe and my wishes are carried out?
Your desires for your life should be the most important consideration to all your family members, community, and medical team, but they can only be followed if those caring for you know your wishes. That’s why it’s so important to create a living will to document any instructions and a power of attorney assigned to handle decisions when you can longer do so yourself.
Assigning a power of attorney is an easy process that doesn’t require a court hearing or much money to finish. Start talking to your family and your medical provider soon to get the process started so that you can be cared for as best as possible in your elderly years. It’s one conversation that can drastically improve your final years.
Power of attorney FAQs
1. Does every responsibility of the agent need to be written into the paperwork?
It depends. No, if you’re assigning a durable power of attorney to handle all of your financial or medical decisions. If, however, you’re assigning a power of attorney for a specific time period or a specific task, then you’ll definitely want to include that in the paperwork.
2. Are there any powers that cannot be given to a power of attorney?
Definitely! You can’t legally assign someone the power to marry you to someone or initiate or complete a divorce on your behalf. Your power of attorney can’t vote for you or make or alter a living will.
3. When does the power of attorney take effect?
As soon as you sign the power of attorney paperwork, it will go into effect unless the forms explicitly state that the agent is only triggered if and when you become incapable of making those decisions yourself.
4. Are there risks involved with assigning a power of attorney?
Yes, there are risks involved with assigning a power of attorney. Because the process is one that is designed to give you a voice when you are incapable of speaking for yourself in unimagined situations, sometimes the power of attorney won’t know your preferred option. In this instance, it’s possible that the power of attorney will make a decision that seems appropriate but is not what you would choose yourself.
There is also the risk that your power of attorney will make decisions that actively harm you or your estate. The forms and the system that supports powers of attorney are designed to only allow decisions that are beneficial to the principal, but every power can be abused. In the worst of situations, you will be held accountable for actions taken by the power of attorney in your name, even if those actions were unknown to you at the time they were committed.
That’s why it’s so important that the person you choose to act as your agent is someone you trust entirely.
5. Does signing a power of attorney take away my rights to speak for myself?
Having an agent who can act on your behalf does not take away your ability and right to speak for yourself in any context. Even if your power of attorney disagrees with your decision made in financial or health care matters, your voice will be the deciding body.
If your power of attorney starts to make decisions that you don’t agree with or see as harmful, you should revoke that responsibility as soon as possible.
6. How do I revoke a power of attorney?
You can revoke the power of attorney responsibilities at any point by tearing up the original paperwork or verbally communicating your wishes to your power of attorney. Ideally, you should also communicate this decision in writing to any business that has been interacting with your power of attorney.