Can you imagine a time when your elderly parent might find bill-paying overwhelming? Or make more and more mistakes with the checking account? Or simply prefer not to deal with the hassle of selling the house or a car? If so, it would be good to talk with your Mom or Dad about choosing someone to be a durable power of attorney—either you or someone else. The following points will give you a good working understanding of the role of a power of attorney.
- A “Power of Attorney” manages financial assets. He or she does not make healthcare decisions. For that, you need a person to be a healthcare proxy (also called medical power of attorney or healthcare power of attorney). A power of attorney might pay bills, buy or sell a house or car, begin or end a contract on behalf of the person who’s given him or her the power. The arrangement can be short-term—while your Mom is touring Europe—or long-term—you take over paying bills for your Dad at his request.
- The key players in a power of attorney arrangement are the person requesting the help (called the “principal”) and the person providing the help (called the “attorney-in-fact” or sometime, the “agent”). The attorney-in-fact doesn’t need to be an attorney at all. But he or she should be a trustworthy person close to the principal.
- The principal can still make legal decisions, but the attorney-in-fact acts as a deputy –carrying out the principal’s wishes.
- A general power of attorney has limited powers, and the principal decides what the powers will be. If the principal becomes incapacitated (i.e. unable to make decisions and handle financial and legal matters), the general power of attorney loses all powers.
- A durable power of attorney is someone who can make financial and legal decisions if the principal becomes incapacitated (unable to make decisions and handle financial and legal matters). A durable power of attorney is in effect until the principal dies. However, a durable power of attorney has to be established before the principal become incapacitated. But the duties don’t have to be activated until your parent clearly needs you to do them. Once your parent is no longer competent to understand the legal issues, he or she won’t be allowed to assign a durable power of attorney. Instead, you may need to pursue guardianship through the courts – a more lengthy and complicated process.
- It’s best to visit a lawyer to set up a power of attorney. The lawyer will ensure the agreement is detailed enough. Together you, the lawyer, and your parent will determine the list of duties to be performed, when they should begin, how long they should last. Using a lawyer ensures the principal’s rights are protected and that the agreement is legally sound.
A durable power of attorney is what you’ll need to handle your parent’s legal and financial affairs if he or she becomes incompetent. The best time to arrange for a durable power of attorney is beforeit’s needed, while your parent is still competent. For more information, check out these resources:Federal Office of Personnel Management, Minnesota Board on Aging’s ElderCare Rights Alliance presentation, or Senior Health at About.com.
