Answer: A power of attorney (POA) is a document that allows a competent adult to appoint a person(s) or organization to manage their affairs should they become unable to do so.
The “principle” designates a trusted individual to make financial and or health care decisions on their behalf. A POA does not go into effect until the principle is cognitively unable to make decisions for herself. During this time the principle has the right to change or cancel their designated POA also known as their “agent”.
How can Having a POA be Helpful?
Powers of attorney can be helpful to older adults who want to appoint someone they trust to step forward and make financial and or healthcare decisions should they become unable to do so. This could be a spouse, adult child, close friend or in some instances, a trusted organization.
While some of us will never need to use a POA, unexpected events can occur at anytime to anyone. Having a POA can bring peace of mind that future wishes can be carried out for those “just in case” scenarios. It is also common for older adults with health concerns or who are moving into a senior facility to appoint a child or other trusted individual as their POA.
Setting up a POA does not have to be expensive or time consuming. The process is private and cannot be looked into by the public. If a person without a POA suddenly becomes cognitively impaired and is unable to make decisions, a family member or friend may have to go to court to become an appointed guardian. This process can be expensive, time consuming and very pubic.
Types of POAs
Health care POAs and financial POAs are two separate documents. Both can be as specific or broad as one chooses. Different people may be chosen to to handle each type. For example, you may feel that your daughter is best suited to make financial decisions while your brother handles your health care and medical needs.
Health Care/Medical POA
A health care POA also known as a medical POA deals with health related decisions. Just as any type of POA, principles can tailor the document to fit their specific needs. A good healthcare agent will take the time to fully understand the principle’s preferences and how they define quality of life.
As an agent, some important responsibilities may include making decisions on medical treatments, place of residence and hospice care. Being someone’s healthcare POA is a sacred position with great responsibility. Both the principle and agent can benefit from having in depth and ongoing dialogue.
Financial POA’s handle the financial matters of the principle’s choosing. The principle may have a range of financial power or may be limited to a single transaction such as selling a stock. A few examples of responsibilities may include but are not limited to; estate, benefits, banking, business operation, insurance transactions, stocks/bonds, gifts to charity and tax matters. The agent does not own any of the principles property, he or she can only make financial decisions.
Though hiring an attorney is not required to obtain a POA, many find it helpful. A professional can assure that all your questions are answered and that both parties (the principle and agent) are on the same page. In addition, an attorney can make sure the document meets state requirements and is completed to the principles satisfaction.