For senior citizens and the elderly, there is great benefit in getting their estate in order. Even though they are currently of sound mind, they also understand that there may come a time that they will not be able to make decisions on their own behalf. That is why many in assisted living set up a power of attorney – also known as a letter of attorney – just in case they need assistance in the future.
If you have a loved one in assisted living or an adult residence, you may wish to speak with them about this important document.
A power of attorney (POA) provides written authorization for an individual to represent or act on another individual’s behalf. It applies to primarily to private affairs and business, although other legal matters may be covered. The person authorizing the action is known as the principal, grantor, or donor , while the person they designate to act on their behalf is known as the agent, attorney, or attorney-in-fact.
What is a Durable Power of Attorney? A general durable power of attorney (“DPOA”) permits an individual to appoint someone to make legal and health care decisions on their behalf should the need ever arise. It is determined “general” as it covers a broad range of situations. The situations may include selling real estate or accessing bank accounts and other investments.
How Competency Relates to Power of Attorney (POA)
A general durable POA takes effect upon signing. This means that the principal does not have to be deemed incompetent in order for the POA to be valid. However, this does not mean that the principal loses any rights upon signing – they still have the ability to act on their own behalf.
Some POAs have “springing power”—indicating that the authority is only activated when a physician determines that the principal is no longer able to make their own decisions. Choosing the agent who will have decision making ability is very important, as they have broad authority. Very often couples choose their spouse as each other’s agents, with a child stepping in if both parents are incapacitated.
What Does Fiduciary Responsibility Mean?
Fiduciary responsibility indicates that the agent is only allowed to act in the best interest of the principal, and is not legally permitted to enrich or benefit themselves.
Parents often designate a child with a series of successor agents named. If the first designated agent does not want to serve, or is incapable of serving, there is someone in place to take the position. It is not recommended that you create a POA without at least 2 or 3 named successors. Otherwise, the agent will have the power to choose anyone they wish to succeed them.
According to state law, an agent cannot disburse personal property without the principal’s consent. However, the principal can add a Medicaid planning paragraph to the power of attorney. This allows for the allocation of personal property and assets to the family while aiding access to Medicaid coverage.
It is imperative that a professional attorney prepare the power of attorney document. The expertise and legality of the document relies upon correct wording; and a properly executed document will ensure a smoother and more peaceful transition should it ever be needed. If your loved one is in an assisted living facility, preparing a POA is one of the most important things you can do.
At A Banyan Residence, we are dedicated to making sure that our residents enjoy the best life possible.