Check out our resource library to get started.
Have you thought about who will make important decisions on your behalf if you’re suddenly unable to do so yourself? It’s a scary thought, but it’s also a key component in any estate planning arrangement.
At the heart of it all, neglecting your Powers of Attorney (POA) can put the wrong people in charge of your estate. If you have an aging parent or family member, this consideration is especially important. That’s because the likelihood of needing a responsible decision-maker looking out for your best interests increases with age.
It’s not exactly the most appealing topic to think about as taking care your parent as they age. However, if they value the wealth they’ve accumulated throughout their life as well as their future health outcomes, assigning power of attorney to you or a loved one should be a no-brainer.
In this article, we’ll demystify everything you need to know about the powers of attorney for a parent, especially as it relates to long-term care.
In a nutshell, a power of attorney makes you an attorney-in-fact for your loved one. These agreements empower an agent, typically a loved one or relative, with the legal right to make life-altering decisions on their behalf.
A power of attorney for health care is especially crucial because decisions more directly impact livelihood.
As an example, let’s say your parent develops dementia as they age. Before their decline, they gave you – their adult child – the powers of attorney. As their medical needs grow more invasive, they’ll likely need to adjust their livelihood by enrolling in a memory-focused nursing home or receiving an increased amount of medical care in some way.
In this situation, their health care decisions fall to you. And as a loving family member looking out for their best interests, you’re in a much better position to make clear decisions that benefit your parent.
This situation is just an example of the decisions many Americans face at some point in their lives. If your parent wants their livelihood’s decisions in the right hands, they need to arrange a power of attorney for you or someone they trust.
There are a few different classifications for powers of attorney that you should get familiar with if you have an aging parent. Arranging the right agreement sooner rather than later will substantially reduce stress and anxiety down the line.
First of all, any power of attorney agreement should be a durable one. Durable simply means that once it is signed and notarized, your POA agreement goes into effect until either the principal revokes it or passes away. If your POA agreement isn’t durable, the document could lose its power once your parent becomes mentally incapacitated. There are some other legal ramifications as well – the arrangement may fail to go into effect given a few different circumstances.
When you are arranging a power of attorney agreement between yourself and a principal, it’s sometimes best to meet with an elder law attorney. They can guide you through the process and ensure the legal documents you fill out check all the boxes.
In contrast to a durable POA, a springing power of attorney means that your agreement doesn’t go into effect until something specific happens. These stipulations go into effect when a medical issue or anything that causes incapacity occurs.
This option is tempting for many senior citizens because they want to maintain control until the last possible second. Although that makes sense from their perspective, they also need to understand that a sound mind doesn’t disappear overnight – it happens steadily over time.
Due to this nature of aging, its best for your parent to arrange a durable power of attorney.
While the two powers listed above deal with the logistics of the powers kicking in, the next two types outline the specific topics they govern.
If you have Financial POA with your parent, that means you are legally empowered to handle financial matters on their behalf. This agreement could include a lot of different financial decisions, including real estate sales, paying bills to financial institutions, or simply cashing a social security check. By possessing the financial power of attorney, you could even access their bank accounts.
This financial access is why it’s incredibly essential for the power of attorney to go to a trusted agent. Agents have access to broad powers in some standard agreements, so they aren’t restrained in their decisions on behalf of their loved ones. This agreement is a very positive thing for seniors who have financial assets that they’ll no longer be able to monitor effectively.
A medical power of attorney gives your parent the chance to state their medical wishes in advance clearly. This contract is sometimes referred to as a living will – that you’ll be responsible for informing doctors about your parent’s desires.
Owning conservatorship is a significant responsibility, but when it is in trusting hands, it can bring a lot of comfort to a senior citizen who is uncertain about what the future may hold. They can feel confident knowing you’re looking out for their best interests and that their desires will be respected.
Although properly assigning power of attorney to a trusted agent is a crucial part of estate planning, many senior citizens worry they’ll transfer too much power away to their adult children. A durable POA indeed grants a lot of powers, but it’s a common misconception that it gives another person complete control over another’s health and money.
One of the critical legal checks on the powers an agent assumes is that you must always act in the principal’s best interest.
In laymen’s terms, if you have power of attorney for a parent, you must always make decisions that are clearly in their best interest.
What’s more, most decisions you make using powers of attorney are subject to legal scrutiny. With that in mind, you may need to back up any choices you make on their behalf with legal justifications.
Think of these powers as an extension of your parent’s voice. When you have the financial power of attorney, your financial decisions should align with what your parent would want if they were in a position to have their voice heard. The same goes for medical power of attorney, where you may need to make decisions that they would also make.
So while these powers do give you a more substantial say in what is happening, it isn’t a blank check for you to suddenly take over their lives. This particular bit of information helps senior citizens who are mulling whether or not they should enable a power of attorney.
While it isn’t something many consider as they age, your parent must set up power of attorney before they need it. That’s because assigning power of attorney can quickly devolve into a messy ordeal if the principal (your parent) is unable to make clear decisions on their own already.
Generally, to grant legal decision-making power to another party, your parent will need to have a sound mind. If they develop a cognitive disease as they age, such as dementia or Alzheimer’s, they won’t be in a clear state to grant new powers effectively.
You want your parent to make informed decisions – especially ones of this magnitude – while they still can do so. If a concerning diagnosis occurs before a power of attorney is established, you might need to engage in a complicated court battle to gain conservatorship.
First off, you don’t need to hire a professional attorney to execute a legal power of attorney. You can download the necessary Power of Attorney forms online.
But while it isn’t a necessity, getting a set of trained eyes on any significant decisions you make certainly won’t hurt. Consulting legal advice from an elder law attorney is especially useful if you are unsure about any details in the process. As mentioned earlier, decisions made using the powers of attorney are subject to legal scrutiny. You need to be able to prove it is a decision your parent would support if they had the facilities to do so.
An attorney can help you fill out the general power of attorney forms. If, however, you do not use an attorney, make sure you follow these steps:
Of course, any parties involved should have a sound mind and be at least 18 years of age or older.