By Team Tomorrow
Published June 21, 2021
Baby Boomers are retiring in record numbers. As the ranks of the elderly continue to grow, you may naturally start to think about what may happen when you or your parents are no longer in a position to make decisions for yourselves about medical, financial, or legal issues.
You are probably familiar with the idea of a “power of attorney” to empower another person, or power of attorney agent, to act on your behalf. However, if you become unable to make or express your own decisions in the future, what you need is a durable power of attorney, and it needs to be in place while you are still mentally competent.
Granting someone power of attorney enables them to sign or make decisions on your behalf. The power to act in your behalf can be general, allowing them to make a variety of decisions on your behalf, or it can be limited, giving specific powers and/or for a specific duration. Limited power of attorney can also be called special or specific power of attorney, and be limited to a specific, one-time action or decision.
Power of attorney can also be durable, non-durable (the “regular” kind), or springing. Durable power of attorney stays intact even if and when the person granting it is no longer mentally fit or able to make their own decisions; non-durable power of attorneys ends when the person becomes incapacitated. And springing power of attorney is the opposite of the regular power of attorney—it only goes into effect when the person granting it becomes incapacitated.
A durable power of attorney is frequently recommended so that you are not left in the lurch without someone to make the decisions you would make when you are no longer able to do so.
The difference between a regular power of attorney and durable power of attorney, whether limited or general, is that the regular power of attorney ends automatically when the principal (the person granting the power of attorney) becomes incapacitated. This non-durable power of attorney can also be designated for specific transactions or for a specific time period, and can be revoked at any time, in which case the representation would end as designated or when revoked.
A durable power of attorney (durable POA) is specifically meant to continue even if the person granting the power of attorney, the principal, becomes incapacitated. The durable power of attorney may be revoked at any time by the principal as long as they still have the mental capacity to make their own decisions, or possibly by a third party, if they can show that the agent is abusing their power. Unless revoked (or successfully contested by a third party), the durable power of attorney remains in place until the death of the principal.
Neither power of attorney (non-durable) nor durable power of attorney continue after the death of the principal.
Although this is no substitute for legal advice, if you have a copy of the power of attorney, here’s what to look for: a clause that says essentially that the power of attorney will remain in effect, even in the case of disability or physical or mental incapacity of the principal.
If your power of attorney contains a phrase along those lines, then it is likely a durable power of attorney, which will continue to be in effect even if you become incapacitated.
This is somewhat state specific—for example, in Pennsylvania, a power of attorney is presumed to be a durable power of attorney unless it expressly states otherwise.
The legal standard for incapacity varies from state to state. Some states require two doctors to sign a statement agreeing that the principal is no longer mentally competent. Other states are moving away from a blanket statement of incompetence and instead making determinations of if the principal is competent in a given situation, thus avoiding a permanent or sweeping determination of incapacity. In some cases, the power of attorney itself gives the criteria for incapacity or incompetence.
But what courts are essentially looking for is an indication that the principal understands a given agreement or decision and understands the consequences of entering into the agreement or making that decision.
An agent is able to make decisions and do a variety of things on your behalf according to the power you grant them in the power of attorney.
A limited power of attorney may be limited in whatever way you specify—perhaps you will only give your agent power to sign a certain document or make decisions on a specific issue or in a specific time frame within certain parameters. For example, a medical or healthcare power of attorney is limited to only healthcare or medical issues if or when the principal becomes incapacitated.
If it is a general power of attorney, then the kinds of things your agent may do on your behalf are quite broad. You can still give your agent parameters, but they will have more flexibility and liberty to act. General power of attorney normally does not include a healthcare or medical power of attorney—that is generally a separate, limited power of attorney.
Here’s an incomplete list of some of the things that an agent may do on your behalf, under either general or limited power of attorney:
If you create a limited power of attorney for different situations or times, you can designate a different agent for each limited power of attorney. Or you can name an agent under a general power of attorney and a separate agent for a medical power of attorney. But what about more than one agent in the same power of attorney? Co-agents? You can. But because this kind of arrangement often leads to conflict, it would be wise to include in your power of attorney some direction or preference for how to resolve disputes.
If the conflict cannot be resolved, then the parties could take it to court to ask a judge to decide. A better alternative to naming co-agents would be to name an agent, and then to name an alternative, in case the first named agent is unable to act as agent.
Power of attorney for medical decisions must be granted specifically in a medical power of attorney. It is by definition a durable and springing power of attorney, because your agent will be able to make decisions for you about your medical treatment if you become incapacitated.
If you do not have a medical power of attorney in place, the default decision-maker if you become incapacitated is generally your spouse. Even, sometimes, if you are formally or informally separated. Some states have specific names for the agent entrusted with your medical decisions, such as health care agent, health care proxy, or patient advocate, to name a few.
If you have specific preferences or decisions that you would like to make ahead of time, you can put them in writing and require your agent to follow the directions given. This kind of written instructions is called an advance directive, and there are state-specific guidelines that should be met.
If you have an advance directive and medical power of attorney, make sure you give a copy to your agent, to your doctor, and have copies to file at home and to take with you when traveling. It is helpful to talk to your family about your medical wishes ahead of time as well to try to prevent future conflict.
It depends what you think your needs will be. The simple answer is that a durable power of attorney is most effective when you most need it, and it is the best choice as long as the agent is trustworthy.
The advantage of durable power of attorney over regular power of attorney is that while you are still mentally competent, you have someone who you trust who is able to help you address business, medical, or legal issues, and they can continue to do so even if you become mentally incapacitated at some point. The disadvantage is that most abuses of power of attorney happen after the principal becomes incapacitated. But in most cases, the benefit of having someone make decisions as you would have them made outweighs the risk of abuse of the power of attorney.
A springing power of attorney is an attractive option for those who only want their agent to be able to act in the event they become incapacitated. But there are a number of disadvantages to a springing power of attorney. The first is that an issue of urgency. Often, when a person becomes incapacitated, there are a number of urgent decisions that must be made and issues that may need to be resolved. But banks and other institutions are notorious for not accepting a springing power of attorney or for insisting on more proof of incapacity or some kind of official notification before accepting the agent acting on the principal’s behalf. This creates a generally unwelcome delay. Another issue is that if your agent only begins to act on your behalf once you are incapacitated, you lose the opportunity to give them direction and oversee their actions.
The most important thing to know is that you must have a durable power of attorney in place while you are mentally competent. If you wait until becoming incapacitated, your power of attorney will not be valid, and if you may have someone making decisions for you that you would not have made for yourself.
You may think you can rely on your spouse or immediate family to make decisions for you, but what if something happens to that spouse or family member and you become incapacitated before writing a power of attorney?
If you start sooner rather than later, you can make your wishes known, choose a number of different agents according to their abilities (and your faith in them), and choose alternate agents in case the first choices do not pan out.
You can modify, revoke, or replace your power of attorney as time goes on, and as you have a better idea of what you want and who you would want to do it.
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