Core Estate Planning Documents - Power Of Attorney
A common question that I hear from clients, friends, and family is, "why do I need a power of attorney?" The short answer is because once you turned 18, you became the only person who could make a health care decision on your behalf or sign your own name.
It is important to differentiate between a Power of Attorney for Health Care (HCPOA) and a Power of Attorney for Property (PPOA). If a doctor or other medical professional cannot communicate with you about your health care needs, whether it is because you are mentally incompetent or physically incapacitated (i.e. in a coma), a HCPOA allows someone else to talk to the doctor and make a decision on your behalf. This authorized person is called your "agent." A key component of the HCPOA is that the agent is making YOUR decision for you. Your agent makes decisions on your behalf based on wishes and desires you express to your agent while you are well, in addition to guidance you provide your agent in the document itself.
The HCPOA offers guidance to your agent when it comes to life sustaining treatment. The document allows you to indicate whether you want life sustaining treatment or not. It also further distinguishes between certain circumstances as to when you want your agent to remove life sustaining treatment devices.
I'm a huge Seinfeld fan, so let’s discuss one of the episodes… There was an episode where Kramer went to meet with his attorney (presumably his estate planning or elder law attorney) and he brought his friend Elaine with him. His attorney begins making up different situations in the future where Kramer's health isn't looking so good. Here’s what he says: "(1) you’re breathing on your own, conscious, but with no muscular function; (2) you have a liver, kidneys, and gall bladder, but no central nervous system; (3) you have one lung, are blind, and eating through a tube; (4) you can eat, but machines do everything else." His point is to ask Kramer whether he would want life support in situations like these. Elaine, the person Kramer is considering to appoint as his agent, is sitting next to him giving her opinion as to what Kramer should do. In some situations you can see that Kramer agrees and in others you can see that he doesn't.
I love this episode because the reality is that we will never have the ability to think of every possible scenario in which we may find ourselves at some point in the future. The important thing is that we have “the conversation” with the people that we are appointing to be our agent(s). We need them to know our wishes and how we feel about end of life issues. It will be hard enough for this person we appoint (in a lot of cases our spouse or adult child) to make a decision, so we want to make sure that we equip them with an understanding of what we would have done for ourselves had we been in a position to make the decision on our own.
A PPOA, on the other hand, allows your legally appointed agent to sign your name on your behalf and to handle your financial affairs. If you were to become mentally incompetent or physically incapacitated, who would continue to pay your monthly bills on time so your mortgage is current and your gas and electricity aren’t shut off? Who would be dealing with Medicare, Social Security, or the IRS on your behalf? There is no default to one’s spouse in situations like this, which many believe is the case. If you do not have a PPOA in place at a time where you are deemed incompetent or incapacitated by a physician, there is no one else that has the legal right to access the proper accounts and take care of your financial matters for you.
If you do not have a HCPOA or PPOA, a legal guardian will need to be appointed by a court to allow someone to make health care decisions for you or to be able to legally sign your name. A guardianship can be an especially arduous process when the disabled individual (the ward) does not agree to the guardianship.
To avoid the potential of any costly and unnecessary court proceedings, you should consult with an estate planning or elder law attorney to ensure that you have valid Powers of Attorney for Health Care and Property in place. This will not only protect you, but will save your loved ones a lot of aggravation and expense in the future.Back To Articles