A durable power of attorney (POA) is one of the most valuable tools in your estate planning process. It is indispensable and everyone should have one–everyone.
Each POA should be drafted to fit your particular needs. While there some similarities in most, the differences to accomplish what is needed for you may be dramatic.
General description of a Power of Attorney
Powers of attorney have been around for years. Originally, a power of attorney was automatically revoked upon the disability or death of the make or grantor of the power. However, the Kansas legislature has seen fit to join other states in making powers of attorney exist beyond the disability and even death of the maker. Thus, the term “durable” was added to show that the durable power of attorney will survive the disability or even death of the maker, under certain circumstances.
There are basically two types of durable powers of attorney: One for health care decisions and one for business decisions (there are also numerous subcategories of limited powers of attorney that are granted for limited purposes only).
Durable Powers of Attorney for Business Decisions
What is a business POA?
A business power of attorney is a document in which you grant to another person the power to act on your behalf regarding various business matters. The person granted the power is referred to as the agent or attorney-in-fact. A durable power of attorney allows the attorney-in-fact to continue to handle your business affairs, even though you are disable, either temporarily or permanently.
The granting of the power may be immediate (so that the attorney-in-fact appointed can act for you now), or it can be designed to be effective upon the occurrence of a certain event or events (called a “springing” power of attorney). A good example of an event triggering a POA is your disability. You have the power to define what the triggering event is.
What powers does a POA grant?
The attorney-in-fact can have as many powers as you give in the document establishing the POA, including, but not limited to:
transaction of business
allows dealing your banker
ability to sign documents on your behalf
ensure continued operation of your business
make Medicaid division of property and spend down decisions
open and close accounts
enroll crops in various government programs
transfer property for your benefit
The business durable power of attorney also allows you to name who you want to be the conservator should one be appointed for you, either voluntarily or involuntarily.
Durable Powers of Attoney for Health Care Decisions
What is a health care POA?A power of attorney (POA) for health care is similar to the one for business decisions. The obvious difference is that the power granted is to make health care decisions on your behalf, even though you are disabled, either temporarily or permanently.
Like the business POA, the granting of the power may be immediate, or springing. A good example of an event triggering a POA is your disability. You have the power to define what the triggering event is.
What power does a health care POA grant?
The attorney-in-fact can have as broad of powers as you want or the attorney-in-fact powers can be limited.
consent to a necessary operation
consent to an elective operations
determine nature of the care you need (in-home, hospital or long term care)
enroll you in various government programs to assist in securing health care for you
obtained medical records and information
determine whether or not treatment should be withheld or curtailed
consent to organ donation
express your wishes concerning quality of life
decisions (whether you want a feeding tube, respirator or the like)
consent or refuse certain medical procedures (such as CPR, ventilation, feeding tube, dialysis, etc.)
The health care durable power of attorney also allows you to name who you want to be a guardian should one be appointed for you, either voluntarily or involuntarily.
Triggering Events of a Power of Attorney
As mentioned earlier, a power of attorney, whether it is for business decisions or health care decisions, can be effective immediately, granting your attorney-in-fact the power to act right away, or it can be a springing power of attorney.
A typical example of a triggering event is your disability. But what is disability? In the power of attorney, you have the ability to define what is disabled. Does not being able to walk constitute disability so as to trigger the power of attorney? Does blindness?
By fashioning your power of attorney in an appropriate manner, you can set a standard or definition for disability before the power of attorney becomes effective.
You can even put in your power of attorney who you want to act as your guardian or conservator, in the event someone files a guardian conservatorship regarding your abilities and well being.
Revocation of a Power of Attorney
So long as you have capacity (the ability to make decisions on your own) you can revoke your power of attorney. There are several ways to do it. One is by executing a new power of attorney which supersedes the prior power of attorney. Another way is to prepare a revocation document and file it of record with the Register of Deeds office in the county where you reside. Another method is merely to tell your attorney-in-fact that you are terminating the power of attorney and provide anyone that they provided the power of attorney to with a copy of your revocation.
No Power of Attorney
What happens if I do not have a durable power of attorney?
When you become disabled, you will not be able to handle your own affairs or make decisions about your health. If no business durable POA is available, someone, like a relative, friend, or even the local authorities, may petition the courts to have a guardian and/or conservator appointed for you. The conservator and/or guardian will handle your financial and health affairs, in accordance with the instructions of the court. Generally, a performance bond is required, paid from your assets, as are the costs of setting up the conservatorship/guardianship.
The conservator and/or guardian have much less flexibility than a POA: it does not follow the wishes you may have expressed prior to your disability. Generally, the conservator can not be involved in anything other than management of your property, with conservative, non-risk investments (insured bank accounts, CD’s and the like). No gifting is allowed, which could impact the ability to do estate and medicaid planning. Any unusual health decisions will require approval of the probate court, after a hearing.
Unless you have the capacity to express yourself, you have no input on who your conservator or guardian will be!
All of these procedures are costly and will come out of your funds. In addition, they are very destructive to family relationships when there is such disagreement over the type of care that you may want. By expressly directing a person to make those decisions, you have taken the burden off many family members.
Form Power of Attorney
There are numerous form books and internet sites with powers of attorney “guaranteed” to work in any state. While they may certainly grant a version of a power of attorney, most likely it will not conform to your needs. With your input, an appropriate power of attorney can be customized to your specific situation.
A power of attorney is too important a document to use some form. You need to seek competent legal advice from an attorney who specializes in estate and/or Medicaid planning to meet your desires. It is not a simple sign your name and take this form.