Setting up and enforcing Power Of Attorney (POA) documents can be very confusing for most. Note that below are essential tools that can help aging adults and their families gain peace of mind regarding care and planning.
The two types of POA Power of Attorney
First, It’s important to distinguish between the two main types of POA
Healthcare and Financial.
A healthcare POA gives a trusted friend or family member also referred to as an agent the ability to make healthcare decisions about a person’s care if they are unable to do so. A financial POA gives an agent the ability to make financial decisions for a person if they are unable to do so.
The difference between these two types is, with a POA, an individual can decide in advance who they want their agent to be if they become incapable of making decisions for themselves. Conservators and guardians are court-appointed individuals
What can a POA do?
Here are examples of the kinds of decisions each type of POA can make.
In the name of the principal, a healthcare agent can decide: What medical care they receive. This is also dependent on the financial means of the person in need of care and the approval of the financial POA
Where they live
Where they eat
Who can bathe them
What medical care they receive. This is also dependent on the financial condition of the person in need of care and the approval of the financial POA
In the name of the principal, the financial agent can
Pay for health care and housing
Make investment decisions
There are some states that have adopted the recently created, Uniform Power Of Attorney Act (UPOAA). This law sets some basic ground rules for Power of Attorney, POA contracts. It determines which powers are included in the documents by default, and which need to be explicitly addressed.
UPOAA mandates that:
- A POA is valid and durable as soon as it’s signed. This provision is important because it gives a principal the flexibility to decide how involved they want their agent to be while they are still in possession of their faculties. For example, a financial agent could handle the daily tasks of paying bills and buying food, while the principal continues to make their own investment and major purchasing decisions.
- Compensation for decision makers, gift-giving, and any beneficiary changes must be outlined in the POA document. A common question people have about POAs is whether or not someone is allowed to be paid for being making decisions for an injured loved one. For this to happen, it will need to be described in the legal document ahead of time. It is advised that elder adults who are considering assigning someone to have POA to think about including a provision to allow a person to be paid for their services.
- Third parties such as banks, doctors, other family members cannot be held accountable for upholding the decisions of a POA, power of attorney that appears to be legitimate and legal.
- A POA, power of attorney can’t survive the death of the principal.