As parents get older, children often must take on additional responsibilities to manage their parents’ interests. If you’ve recently noticed that your parents are not able to care for themselves and their financial needs the way they once did, it might be time to learn more about getting power of attorney.
Understanding what power of attorney is, the different types of power of attorney designations, and when a power of attorney contract may be needed is essential for adult children who are caring for aging parents.
Power of attorney is a legal designation that allows one person to act as a representative for another person in business, financial, or health decisions. The person (known as the “agent”) who becomes the power of attorney is typically not an attorney. Rather, this is just the term used to describe a certain type of legal relationship that usually takes place between family members or trusted friends. Adult children often get power of attorney over their parent’s affairs in order to care for their parents properly.
Arranging for the creation of a power of attorney document is relatively straightforward, but it’s definitely better to set it up sooner rather than later. Getting power of attorney documents in order is one of the most important things that family members can do to ensure proper care of aging adults, but this contract must be made willingly by both parties, so timing is key.
Your parents must consent to the creation of a power of attorney contract and they must be coherent at the time when the document is signed. If you wait to get power of attorney until after your parents are no longer coherent or mentally sharp, you will have to pursue guardianship instead.
Power of Attorney Basics:
● Power of attorney is a legal relationship that’s documented in writing to entitle an agent to act on behalf of another person (known as the principal).
● The agent has either broad or limited legal authority to make decisions about the principal’s finances, property, or healthcare.
● Power of attorney is often set up when the principal becomes ill or disabled, but it can also be used when the principal simply can’t be present to sign for their own financial transactions.
● All states recognize some type of durable power of attorney, but there is no standard power of attorney form that’s used in every state. Each state differs in terms of the laws and procedures for establishing power of attorney.
● Though the agent has the authority to make many decisions on behalf of the principal, they cannot make, change, or revoke a will and they cannot vote on behalf of the principal (though they can request a ballot on the principal’s behalf).
Your aging parents certainly want to hold onto their autonomy and independence for as long as possible. However, it might be necessary to make legal changes in your power of attorney relationship even before their independence becomes an issue ( for example, to make sure that they’ll have the necessary resources to get through their golden years).
The chosen family member will act as the decision-maker on the parent’s behalf to step in at crucial moments when the parent either can’t make decisions for themselves or would rather not have to.
Below are some example situations when it would be valuable to have power of attorney in place for aging parents:
● An aging parent is scheduled to have surgery and he/she wants to know that someone has the power to make healthcare decisions on their behalf during their recovery.
● A parent who has decided to travel during their retirement would like to leave their financial or business responsibilities behind at home with a representative.
● A parent receives a dementia diagnosis and they want to be sure that their financial, business, and health decisions are left in good hands with someone they trust.
● An aging parent needs assistance with their financial obligations and they wish to hand-off some of these obligations to a trusted representative.
● An aging parent simply wants to make sure various responsibilities and decisions are being managed by someone they’ve legally designated.
This article covers basic information about what power of attorney is, how it works, how to get it, and how it differs from other legal designations such as guardianship. We’ll talk about the rights and responsibilities that come with receiving power of attorney as well as the different types of power of attorney that are appropriate in different situations. Use this guide to better understand when and how to set up power of attorney before your parents are incapacitated.
What Is Power of Attorney?
Power of attorney is a special, written authorization that gives decision-making power to a representative on behalf of another individual. Essentially, it is a legal document that gives the “agent” or “attorney-in-fact” the power to make decisions on behalf of the “principal”.
Children (acting as agents or “attorneys-in-fact”) often get power of attorney over a parent (the principal) when the parent gets older and wishes to ensure that their best interests will be cared for by a trusted loved one.
This legal designation becomes essential if your parent becomes ill or incapacitated, or if certain events require that the parent have a representative who acts on their behalf. Power of attorney should always be considered when planning for long-term care.
Though power of attorney is a binding legal arrangement, there are situations when the contract can be revoked. Below are reasons why power of attorney of an adult child for a parent may end:
● The principal dies.
● A court invalidates the power of attorney.
● The principal revokes power of attorney.
● The agent can no longer carry out their designated responsibilities.
Power of Attorney vs. Guardianship
Power of attorney shares certain features in common with guardianship as a legal designation, but these are still two very different legal relationships. In order to get power of attorney, you must have your parents give you their authorization in front of a notary public. In some states, the notarized signatures of witnesses are also required.
In contrast, guardianship rights involve approval and supervision of a probate court and the designated guardian has to prove incapacity of the person they wish to represent. Incapacity can be proven through medical statements in guardianship cases but because power of attorney covers financial and business as well as health-related decisions, authorization by the parent is necessary and must be give before the parent becomes mentally incapacitated.
Power of attorney is often preferable as a legal designation over guardianship because it is less expensive and much less time consuming to get it, and you have the ability to make decisions along a broader spectrum from business and finances to healthcare. In some power of attorney situations, children are also given broad legal authority to make decisions on behalf of their parents, but in other situations, they’re given more limited authority.
General Power of Attorney vs. Limited Power of Attorney
Power of attorney designations may be put into two broad categories: general or limited. In some cases, general decision-making responsibilities are conferred to a group of people (e.g. siblings), and general decisions about the principal’s well-being are shared among these people.
General Power of Attorney
Below are characteristics of general power of attorney designations:
● A general power of attorney can act on behalf of the principal on general matters as authorized by the state.
● The general power of attorney is authorized to handle bank accounts and financial transactions such as signing checks, selling properly, selling stocks, and filing taxes.
● General power of attorney may be granted to more than one person. For example, members of a sibling group may all work together to manage the general decision-making for one parent.
Limited Power of Attorney
Below are characteristics of limited power of attorney designations:
● The agent in a limited power of attorney relationships may only act on behalf of the principal on very specific matters.
● The limited power of attorney relationship may be restricted to a certain time period (for example, if the principal plans to be traveling for a certain amount of time).
The Types of Power of Attorney
There are several different types of power of attorney designations that can be enforced to enable the agent to manage the principal’s affairs.
Conventional Power of Attorney
Conventional power of attorney comes into force at the moment when the document is signed and it remains in force until the principal becomes unable to make coherent decisions. This type of power of attorney may be either general or limited.
Limited power of attorney may give very specific authority to the agent. In contrast, broad or general power of attorney may give the agent access to the principal’s bank accounts. A conventional power of attorney contract may lapse when the principal become incapacitated, which can be inconvenient. A durable power of attorney may be preferable as a result, in certain situations.
Durable Power of Attorney
If the principal in a power of attorney relationship suddenly becomes incapable of making a decision on his or her own behalf, that power of attorney agreement would end automatically, but if the principal wanted the power of attorney to stay in effect after the principal’s health deteriorates, a durable power of attorney contract should be created and signed.
Durable power of attorney is a legal designation that goes into effect as soon as it has been signed and it stays in effect until the principal either dies or revokes it. If you have a power of attorney document that is not durable, that means that it will not longer have any power if the principal becomes incapacitated. For adult children who wish to care for their aging parents, durable power of attorney is essential because it guarantees that the child will have authority to make decisions for the parents when it’s needed most.
Financial Power of Attorney
A financial power of attorney, gives the agent the authority to make financial decisions on behalf of the principal. This designation does not allow the agent to make healthcare decisions on the principal’s behalf.
Below are the types of decisions that are commonly made by a financial power of attorney:
● Management of the principal’s property.
● Collection of the principal’s debts.
● Applications for government benefits for the principal (Medicaid, veteran’s benefits, etc.).
● Investment decisions on the principal’s behalf.
● Filing taxes on the principal’s behalf
● Accessing the principal’s financial accounts to pay for essential services such as housing, healthcare, and bills.
Medical Power of Attorney
A medical or healthcare power of attorney allows an agent to make medical decisions on behalf of the principal. Typically medical power of attorney is granted when the principal is incapacitated, but it can be set up when the principal is still fully functional.
Using the medical power of attorney, the agent makes healthcare decisions on behalf of the principal, but they do not make financial decisions on behalf of the principal. As the medical power of attorney, you can make decisions about your parent’s healthcare, but your parents must still have the financial means to pay for the care.
Below are the types of decisions that are commonly made by a medical power of attorney:
● What the principal eats.
● Who may bathe the principal.
● Where the principal lives including decisions regarding assisted living or long-term care.
● Which doctors and healthcare providers provide care to the principal.
● What medical care the principal may receive including home health care, psychiatric treatment, and hospital care.
Springing Power of Attorney
A springing power of attorney is used by the principal to authorize a specific person as their agent, allowing the principal to set up the legal relationship while they are still fully functional and able to make wise decisions on their own behalf.
But a springing power of attorney doesn’t go into effect until something happens that causes the principal to become incapacitated. A medical declaration could be made to prove incapacity in a situation involving a springing power of attorney designation.
Springing power of attorney is an excellent option for a parent who wishes to stay autonomous and independent until it simply isn’t possible anymore, but this designation can be troublesome in situations involving dementia.
When a parent develops dementia the mind doesn’t usually go all at once. Rather, there are stages of cognitive deterioration that occur before a doctor could say that the principal is mentally incapable of caring for themselves. As such, it is often best for parents to start by designating a trustworthy durable power of attorney instead of signing a springing power of attorney contract.
How do you get power of attorney over an elderly parent?
To get power of attorney over an elderly parent, you’ll need to discuss this legal designation openly and convince the parent or parents to give you the authority to make certain decisions in their lives. Below are the steps you should follow to discuss power of attorney with them in a way that they can understand so you can work together to come up with the best legal situation for everyone involved:
- Find a time when your parent(s) are oriented and alert to discuss power of attorney.
- Tell your parents that power of attorney is a legal designation that will make it possible for you to make decisions on their behalf if they become incapacitated. Make sure they understand that power of attorney requires you to act in their best interest and make sure their wishes are fulfilled.
- Your parent(s) must understand that in order to get power of attorney, they must agree to it before they become incapacitated. If they wait until after they are incapacitated, you will have to file for guardianship instead of a power of attorney (a much more costly and difficult process). Without power of attorney you won’t be able to protect their best interests.
- Download and print a power of attorney form available for your state. Write down the powers your parents wish to grant you, no matter whether these powers are very broad or very limited.
● On this form, you will be the agent or attorney-in-fact.
● Your parents will be the principal.
● Your parents can name alternate agents on this form.
- Determine whether or not your state requires witnesses to grant power of attorney. If your state requires witnesses, contact people who would be willing to act in this capacity.
- Describe springing power of attorney. This is a legal designation that allows your parents to retain their independence until they become incapacitated. They can authorize you as power of attorney to become effective if or when they become mentally or physically incapacitated (or at the moment that their doctor declares that they are incapable of making decisions).
- Note when the power of attorney designation becomes effective and how long it is scheduled to last. Your parents may wish to designate a specific time when the power of attorney will end if they become incapacitated.
What Rights Does Power of Attorney Give You?
As power of attorney, you may be given the authority to make the same types of decisions that your parents typically make for themselves. These decisions may be financial, business-related, or health-related. Your rights as power of attorney are granted under the premise that you’ll act in your parent’s best interests. To the extent that the power of attorney is holding true to their parent’s best interests, their rights will stay in force.
If you’ve been granted general power of attorney, chances are, you’ll have the right to make decisions about any and all matters that pertain to your parent’s lives. You may have access to your parent’s bank accounts and the authority to sign checks on their behalf, but your parents will still be able to control and access their money and property too.
If you are acting as the agent for your aging parent, you should not take or use their money without first asking their permission. Though you may have broad authority to make decisions about the principal’s medical care or financials, there are certain rights that a power of attorney does not have. Below are some important restrictions on the authority of a power of attorney:
● An agent cannot change the principal’s will.
● Agents must act in the principal’s best interest financially.
● Agents cannot make decisions on the principal’s behalf after the principal’s death.
● An agent can’t transfer their power of attorney to another person. They can, however, decline the appointment at the time it is offered, but unless the principal named a co-agent or an alternative to the designated agent in the same power of attorney document (or is still capable of choosing a different power of attorney on their own behalf), an agent can’t choose a new agent to take over their responsibilities.
Power of Attorney Responsibilities
Often, people are confused about what it means to give decision-making authority to a power of attorney. It’s a common misconception that after power of attorney has been granted, the agent has total control over the principal’s money and health. But in reality, power of attorney is much more nuanced than that.
Anyone who acts as an agent in a power of attorney relationship, must act in the principal’s best interests or risk revocation of the contract, or worse, criminal charges. The principal who gives decision-making authority to an agent, still retains access to their assets and the ability to make important decisions within their mental capacity.
As the agent in a power of attorney relationship, you will be legally responsible for making decisions on behalf of your parent. When you sign the power of attorney document in front of a notary public, you will be legally bound to fulfill these responsibilities. If you fail to fulfill your responsibilities toward the principal, you could be liable to compensate them for any losses they suffer and you could also face criminal charges for ill-treatment or willful neglect, if applicable. The principal does not become powerless when he or she grants power of attorney to an adult child.
Below is a list of the tasks you must fulfill as the agent in a power of attorney contract:
● You must act in the principal’s best interests at all times.
● You must help the principal make their own decisions whenever possible, rather than simply taking control.
● A power of attorney should only make decisions within the domain specified by the principal. For example, if the principal has granted decision-making authority in the realm of finances, then the agent should not make decisions about the principal’s healthcare.
● If the principal restricts the decision-making capacity of the agent, these restrictions must be respected. (For example, if the principal asks that the agent not make gifts, that needs to be respected).
Can you get power of attorney without consent?
If your parents refuse to give you power of attorney even though they’re not really capable of making decisions for themselves anymore, guardianship may be a suitable alternative that would allow you to get decision-making power over their general well-being.
Often, power of attorney is granted when the parent becomes ill or disabled or when they simply can’t be present (because they’re traveling or incapacitated in some other way) to sign legal documents to make important financial transactions. But you have to have the parent’s permission to act as an agent and they have to be mentally coherent and able to designate you as their agent and representative.
Power of attorney can be taken away in certain situations if you fail to perform in their best interests.
If your parents refuse to give you power of attorney and they are mentally incapable of making that decision, you can pursue guardianship right instead without their consent. To get guardianship rights, however, you must first prove that your parents are mentally incapable of making decisions in their own best interests.
How do you prove incompetent parents?
If your parents are starting to lose their ability to think clearly, they may also be losing the ability to make wise decisions. This is a common problem that can occur as a result of dementia, Alzheimer’s disease, stroke, mental illness, or brain injury.
A variety of illnesses can cause a person to start making irrational decisions about finances, healthcare, or their business, but when this happens, you may need to prove that your parents are no longer competent to care for themselves. Proving that your parents are incompetent can be a difficult and painful process, but many adult children must go through it in order to ensure their safety and a high quality of life.
If your parents are no longer able to make good decisions, you will have to seek guardianship over them in order to take control of decisions regarding their finances or healthcare. Guardianship is only appointed when a court hears convincing evidence that the person lacks the capacity to make decisions in some or all areas of their lives.
If you wish to seek guardianship rights over a parent and they don’t want to consent to the guardianship, they have a right to seek out an attorney and object to your wishes.
To get legal guardianship of a parent after they become incapable of making decisions for themselves, you will need to contact an elder law attorney for legal assistance and representation.
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