What is a Durable Power of Attorney and Why is it Important to Elders?
If you were caught in a medical emergency and couldn’t speak for yourself, what procedures would you want to be performed? Who do you trust to make those decisions? We rarely consider these questions until tragedy strikes. However, creating a power of attorney allows you to name a friend or loved one to represent you, and ensure that your wishes are carried out.
What is a Power of Attorney?
A power of attorney is defined as a type of legal agreement between two parties. One party, referred to as the “grantor” or “principal,” authorizes another party, referred to as the “agent” or “attorney-in-fact,” to make legal decisions on their behalf. The grantor either names a single person to be their agent or creates a dual power of attorney, in which multiple agents are empowered.
A power of attorney allows the attorney-in-fact to represent the grantor in legal matters. Depending on the terms of the agreement, agents take a variety of actions on behalf of their principal. They represent the grantor in business transactions or even make decisions about medical care for the grantor.
In a conventional power of attorney, the agreement is nullified if the grantor is incapacitated or otherwise mentally incapable of making decisions. So, what is a durable power of attorney? A durable power of attorney stays in place at all times, even if the grantor is incapacitated.
Requirements for a Power of Attorney
Specific requirements for a power of attorney will vary from one jurisdiction to another. Be sure to check your local laws before entering into such an agreement. However, there are a few broad requirements that are common no matter where you live.
Like with most legal agreements, both parties must be mentally sound to enter into a power of attorney. For this reason, it is crucial to put an agreement in place before an emergency happens. If you are injured or suffer a severe mental illness, you won’t be able to grant power of attorney.
Some jurisdictions allow for oral powers of attorney. However, most institutions, such as banks, hospitals, and the IRS will require a written agreement. A written agreement must be signed by both parties. In some states, the agreement may also need to be witnessed or signed by a notary public. Even if not required, these extra steps can ensure that your power of attorney is stronger and less susceptible to legal challenges.
Types of Power of Attorney
Even though we only think of a power of attorney when dealing with medical emergencies, there are a wide variety of types, for different purposes. These include:
- Financial Power of Attorney – a power of attorney agreement that focuses on a grantor’s financial dealings, such as money transfers or stock trades.
- Health Care Power of Attorney – a power of attorney agreement that focuses on a grantor’s health care concerns, especially when the grantor is unable to decide for themselves.
- Durable and Non-Durable Powers of Attorney – “durable” refers to whether the power of attorney agreement stays in effect if the grantor becomes incapacitated. We’ll discuss durable powers of attorney later in this article.
- Springing Power of Attorney – a power of attorney agreement that only takes effect when a specific circumstance occurs, usually when the grantor is incapacitated.
- Special Power of Attorney – a power of attorney agreement with specific instructions for the attorney-in-fact. These agreements can sometimes cover several of the categories listed above.
The Durable Power of Attorney
A durable power of attorney, sometimes called a “DPOA,” is a special type of arrangement. Unlike a standard power of attorney, a durable power of attorney is not cancelled if the grantor is mentally incapacitated. This allows the attorney-in-fact to make important legal decisions on the grantor’s behalf, especially when the grantor is incapable of doing so themselves.
Most commonly, grantors use a durable power of attorney for health care to allow for medical decisions to be made if the grantor can’t. If you suffer a major injury or illness and fall into a coma, your attorney-in-fact can decide how doctors proceed with treatment, according to your wishes.
A Power of Attorney’s Duties and Responsibilities
Depending on the specific details of the power of attorney agreement, an attorney-in-fact can have a variety of responsibilities. A health care power of attorney usually steps in when their grantor is incapacitated by illness or injury. They specify what medical procedures the grantor wants or does not want to be performed, or what sort of end of life care they want.
A financial power of attorney grants access to financial accounts and gives instructions for managing a grantor’s business dealings. In such a case, the attorney-in-fact might manage business transactions or even make stock trades for the grantor.
Since an attorney-in-fact is considered a fiduciary of the grantor, he or she is legally obligated to be honest with the grantor and follow their instructions as directly as possible. The attorney-in-fact must act in accordance with the grantor’s instructions, rather than under their own judgement. Breaking the rules of the power of attorney could be grounds for a lawsuit against the attorney-in-fact.
Disadvantages of a Power of Attorney
Despite the many benefits of a power of attorney, there are also disadvantages to be considered. First and foremost, the wording of the agreement must be carefully considered. Careless wording could lead to giving out legal powers that you never intended. Work closely with your lawyer to decide exactly what powers and responsibilities you want for your attorney-in-fact.
The second biggest concern when creating a power of attorney is determining who to name as your attorney-in-fact. While we all believe the best of our family members, they may not have our best interests at heart or the capabilities to handle such a position. Untrustworthy agents have taken advantage of grantors many times in the past, often when dealing with elderly grantors. Misusing a power of attorney is a common form of elder abuse.
The only person qualified to give real legal advice is a licensed attorney. Always consult your lawyer before entering into a legal agreement to protect your interests.
What Could Happen Without a Power of Attorney
If someone doesn’t have a durable power of attorney in place when an emergency occurs, their personal affairs can be thrown into chaos. Bank accounts and medical care providers have layers of security to protect their clients, but this security can backfire. Without prior legal authorization, family members often are left powerless to help their relative.
In such a case, often the only option available is to go before a court. A judge can then appoint a conservator or a legal guardian to handle the incapacitated person’s affairs. However, this process is expensive, time-consuming, and prone to fighting between family members.
Setting out a plan in advance by creating a durable power of attorney prevents a great deal heartache for your family during an already stressful time. Relatives won’t have to make painful decisions during a time of crisis.
The Difference Between Durable Point of Attorney and a Living Will in Healthcare
Even though they both take effect in similar situations, a living will is very different from a power of attorney. Each has their own purposes and restrictions. It may even be in your best interest to make use of both in order to properly prepare for emergency situations.
Unlike a power of attorney, a living will doesn’t empower anyone on your behalf. Instead, it provides instructions for friends and relatives on how to carry out your wishes in case of a medical emergency. Note that a living will only covers your choices regarding medical care. If you want to leave your family members instructions for your finances or any other non-medical concerns, a power of attorney is required.
Most often, a living will describes procedures to be taken in case of an illness or injury which you won’t recover from, such as a coma or other incapacitating medical condition. Many may specify that an individual does not want to be kept on life support indefinitely, or that they do not want to be resuscitated in case of cardiac or respiratory failure.
This clause is often referred to as a Do Not Resuscitate order, or DNR. This is one of the most common applications of the living will among terminal patients and the elderly. Measures taken by the living will can range from consent surgical procedures to palliative, or comfort care. Living wills can also specify whether you want to donate your organs, or if you want your body to be donated to an institution for scientific study. Above all, a living will eliminates guesswork regarding the tough questions your family members may have to face in the event of an emergency.
However, a living will does not give any specific individual the authority to make medical decisions on your behalf. It only lays out what actions you want to be taken. This authority must be designated to a medical proxy, often given through durable power of attorney. For this reason, a durable power of attorney is crucial. Once signed, your attorney-in-fact can use your living will as guidance on what to do during an emergency.
It is imperative to set up these important measures sooner rather than later to put your mind and the minds of your loved ones at ease. Don’t wait. Talk to your lawyer about your power of attorney and living will today.