What is a Power of Attorney (POA)?
A power of attorney (POA), allows one person, the agent, to make decisions for another, the principal. “Durable” means it is still valid if the principal becomes incapacitated and ensures continued management of the principal’s property or healthcare. All POAs cease to be valid upon the death of the principal. All POAs in Pennsylvania are durable unless they state otherwise. The agent is required by law to act in the best interest of the principal. The power of attorney document will outline specific duties for the agent.
Why would you want or need a POA?
A comprehensive POA can prevent the need for guardianship if the principal is cooperative. The principal can always overrule the agent unless there is a court order declaring the principal incapacitated. If the principal attempts to do something imprudent or dangerous with his property or himself, an entity (like a hospital, nursing home, bank, etc.) must honor his wishes until a court determines that he is no longer capable of making decisions. An impaired person cannot execute a POA. In that event, someone must obtain legal guardianship.
Types of Powers of Attorney: Financial and Medical
Financial Power of Attorney
A financial power of attorney allows a person you appoint as your agent to act in your place for financial purposes if you ever become incapacitated. A financial power of attorney typically has the power to access your bank accounts, pay bills, withdraw funds from bank accounts, cash checks and manage your investments. In addition, they may have the right to give gifts. Without a power of attorney, for many purposes no one can represent you unless a court appoints a legal guardian. This process takes time, costs money in legal fees, and the judge may not choose the person you would prefer. In addition, under a guardianship, your representative may have to seek court permission to take planning steps that he or she could implement immediately under a durable power of attorney. The court will frequently prohibit a guardian from doing estate planning and asset protection planning that can easily be performed by the agent appointed under a well drafted power of attorney.
Medical Power of Attorney
A durable power of attorney for medical designates someone you choose to make health care decisions for you if you are unable to do so yourself. A living will instructs your health care decision-maker under what conditions to withdraw life support if you are terminally ill or in a vegetative state. While Pennsylvania does allow a close family member to make medical decisions under Act 169, this law can create conflict.
Tips on How to Avoid Sibling Disputes
There is potential for a dispute with other siblings when only one sibling is named Power of Attorney. When a parent designates one child to be the agent under a power of attorney this may create hurt feelings and, in some cases resentment.
Learn your rights and limitations. Knowledge is power.
Do you have a right to be informed? Your parent has the right to not share whom he chose as the agent. Similarly, the agent chosen as power of attorney does not have to provide information regarding the parent to other family members.
Do you have a right to see your parent? An agent appointed financial power of attorney does not have the right to bar a sibling from seeing their parent. On the other hand, a medical power of attorney may allow the agent the right to prevent access to a parent if the agent believes the visit could be detrimental to the parent’s health.
Can power of attorney be revoked? If the parent is competent, he can revoke a power of attorney at any time for any reason. The parent should have a revocation of power of attorney document drafted and inform the former agent. If a parent is no longer competent, he cannot revoke the power of attorney. If the agent is not acting in the best interest of the parent, family members can file a petition in court to challenge the agent. If the court finds the agent is not acting in the principal’s (parent’s) best interest, the court will revoke the power of attorney and a guardian will be appointed.
Is the power of attorney terminated upon death? When the principal under the power of attorney dies, the agent no longer has any power over the principal’s estate. The court will then appoint an executor or personal representative to manage the decedent’s property.
Can co-agents be named as power of attorney? If a parent does not want to choose only one agent, then he may appoint co-agents. Make sure that the document is carefully worded to alleviate problems. Be sure to specify whether they can act individually or whether they must act jointly. A professional fiduciary may be named if a principal does not wish to choose an agent.
Communication is key. Sibling disputes over what level of care is needed or where a parent will live can quickly escalate into a guardianship battle that can cost your family your lifetime of savings. Having a Family Care Agreement (a formal sibling agreement) is an option to offer guidance to the agent under the power of attorney and provide for consequences if the agreement isn’t followed. This plan of action lends for the siblings to give insight about how decisions are to be made. A mediator can offer aid to families in making decisions together.
Value of Planning
More important that preparing any document, the value of planning is the consideration of different eventualities and thinking about how you want those eventualities addressed. While documents can be a piece of the plan, the advice from an experienced planner and the consideration of different outcomes are the keys to an effective estate plan.
Having powers of attorney chosen can save alleviate a lot of expense and stress if you were to become injured, ill or were to suffer from dementia. The more comprehensive and precise the Powers of Attorney document, the better it can do its job.
Call Slutsky Elder Law, an experienced Elder Law firm that is committed to helping seniors and their families secure their future and navigate the maze of financial and legal decisions. We can be reached at (610) 546-2746 to set up an appointment.