Understanding Powers of Attorney

A long term care event can occur at any time in your life. Automobile and sporting accidents; disabling events such as strokes, brain tumors, and spinal cord injuries; and chronic illnesses such as multiple sclerosis and Parkinson's disease are examples of injuries and ailments that can happen to anyone. Even the simple effects of the aging process may require long term care services.

What if a long term care event left you unable to express your views on treatment, relay your care preferences, and communicate who will make decisions on your behalf? No one likes to consider such grim possibilities, but the truth is that a loss of cognitive function can create significant hardships for you and your family.

What is a power of attorney?

A formal document designating a legal representative, also known as an agent, is necessary to allow someone other than yourself to take action on your behalf. A standard document used for this purpose is a power of attorney (POA), and there are different kinds of POA documents.

A POA is a legal document in which the grantor, also called the principal, appoints another individual to act on their behalf as their agent for a specified range of matters. There are many variables and questions that should be considered when preparing a power of attorney, and many people seek the assistance of a legal advisor to draft this document. Some states have their statutory power of attorney forms that are readily available and, when used and completed correctly, meet the state's requirements. It's a good idea to ask your legal advisor if your state uses a specific power of attorney form to ensure your power of attorney is valid.

Determining the type of authorization

A standard or non-durable power of attorney for health care authorizes health care providers to disclose information about your health and care to your agent so that they may assist you in matters related to your case. However, these powers remain in effect only while you are legally competent to manage your affairs. A non-durable power of attorney is no longer valid if you become incompetent. For this reason, it may be a good idea to create a durable power of attorney, which will remain effective and allow your agent to act on your behalf even if you become incapacitated. We recommend that you speak to your legal advisor to learn more about the risks and benefits of durable and non-durable powers of attorney.

A variation of the durable power of attorney is a springing power of attorney. This type of power of attorney is not immediately effective upon signing. As the name implies, a springing power of attorney only springs to effectiveness when the principal becomes incapacitated. The document must specify the certification standard. Many people specify that their agent may only begin acting on the their behalf when their primary care physician or other licensed health care practitioner certifies via a written statement that they can no longer manage their affairs.

Standard or financial powers of attorney are typically the most appropriate documents for insurance claims submission and administration. While health care powers of attorney occasionally address medical care payments and insurance coverage, they are usually limited to making decisions regarding your medical care and following any health care preferences you've expressed. If you have questions about the authority granted under your power of attorney, consider discussing the document with your legal advisor.

A valid power of attorney

For a durable power of attorney to be valid, you must be legally competent when authorizing someone to act on your behalf. That's why it is important to prepare a durable power of attorney while you are in good health.

If you do not have a power of attorney, you should speak with your legal advisor to see if it is appropriate for you. In some cases, people get sick and, due to their illness, cannot manage their finances. If they have not already created a power of attorney authorizing someone else to act on their behalf, the law may consider them incapacitated and not competent to prepare one. Like all legal documents, parties must fully comprehend the nature of the document they are signing.