It is never an easy conversation to have, but being proactive in life is a good thing for anyone over the age of 18 and that means preparing a will or trust to reflect how you would like your personal and financial matters handled after death. What about before death if you become incapacitated? That’s where a Power of Attorney comes into play. This article will discuss exactly what it is, the different types, and much more.
What is a Power of Attorney (POA)?
This is a legal document that allows someone you trust to make decisions for you if you ever become ill or cognitively incapable of doing so yourself. This document can be established for anyone at any age and may be used short- or long-term. For older adults and seniors, having a power of attorney is extremely important as it can help ensure that their financial and medical wishes are respected and achieved.
The Two Types of POA
Financial Power of Attorney
Suppose a senior or older adult becomes ill or incapacitated for any reason. In that case, the established POA will be able to make bill payments on time, make investment decisions and handle any financial affairs. In short, this trusted person will have legal access to your bank accounts.
The four sub-categories of financial power of attorneys are as followed:
Limited Power of Attorney: Usually assigned for a designated period of time or a specific purpose and is utilized by people who have other commitments or a short-term illness.
General Power of Attorney: This gives your trustee broad power to make decisions on your behalf and only as you specify in the legal document, which could be from signing documents and financial transactions to operating your small business. General POA will remain in effect until you pass away, but in most states will end if you become incapacitated.
Durable Power of Attorney: Same as a general power of attorney, this type of POA will remain effective even after incapacitation. This will allow your trustee to manage all your affairs without court involvement.
Tax Power of Attorney: This will allow your trustee to have communications with the Internal Revenue Service (IRS) on your behalf. There are various other forms you may need to fill out, such as Form 2848.
Healthcare Power of Attorney and Living Will
There are three main types of health care directives you can have when establishing power of attorney regarding your health.
Living Will: This will be where you specify your desires when it comes to life-sustaining treatments and should have as much detail as possible. Answer questions like: Would you like life-sustaining interventions? Do you want pain relief only? Do you want to be taken off life support if you are found to have irreversible brain damage?
Healthcare Power of Attorney: Also known as a healthcare proxy or an appointed healthcare agent, this person can make healthcare decisions based on your values and wishes. It is hard to predict every possible implication or scenario that may arise with aging but with a healthcare POA, it is more flexible than a living will. It is also recommended to have an alternate agent in case your primary is not available when needed.
Advance Directive: This combines both a living will and a healthcare POA. This document will indicate what you would like as healthcare preferences but also allow your appointed healthcare POA to make any additional decisions regarding healthcare that have not yet been discussed in the living will.
The Benefits
Listed below are a few reasons why establishing a power of attorney is important to do for aging adults or any adult over the age of 18:
Ensuring Financial Affairs are Managed Properly
As we age, it can become more difficult to manage our finances. Having a trusted person designated as your power of attorney can help ensure your bills are paid on time, your investments are properly managed, and your financial affairs are in order. The POA will have legal access to bank accounts but will not be legally obligated to pay off any debt once the parent or loved one has passed.
Making Healthcare Decisions
Older adults may become unable to make medical or healthcare decisions due to illness or incapacity. With a power of attorney for healthcare, you can designate someone to make these decisions for you, based on your wishes, morals, and values.
Avoiding Family Disputes
When designating a trusted person as your POA, you are helping avoid and prevent family disputes that may arise if multiple family members have different opinions on how something should be handled. Your POA will respect your wishes and will be able to make decisions based on them.
Ensuring Continuity of Care
If an older adult or senior becomes unable to make decisions for themselves, having a power of attorney in place can help ensure their care goes uninterrupted. The designated POA will make decisions about medical treatment, long-term care, and other important matters.
In summary, establishing a power of attorney is incredibly important for older adults, seniors, and their families, as it can help ensure that their wishes are respected, finances are in order, and the loved one is going to receive the care and love they deserve. It is essential to have these conversations early on with family members and a lawyer to ensure that the power of attorney document is accurately reflecting the wishes of the individual.
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