What if an accident or illness – or simply the effects of aging – leave you unable to tell your doctors how to handle your medical treatment, or make it impossible for you to manage your financial affairs? While no one likes to consider such possibilities, nearly every family will face this difficulty at some point. Establishing medical and financial powers of attorney while you’re in good health can give you peace of mind now and may be a gift to your family later.
What Is a Durable Power of Attorney?
Simply stated, a durable power of attorney is an inexpensive and reliable way to arrange for someone to handle your financial or health care decisions in the event you are unable to make decisions for yourself.
A financial power of attorney can be written so that it goes into effect as soon as you sign it. (Many spouses have active financial powers of attorney for each other in case something happens to one of them.) Indicating that you want your power of attorney to be "durable" ensures that it doesn’t end if you later become incapacitated.
You can also specify that the power of attorney only goes into effect when a doctor certifies that you have become incapacitated or have met some set criteria. This type allows you to keep control over your affairs until that time. Again, you must specify that you want your power of attorney to be "durable."
When you create and sign a durable power of attorney, you give another person – called your “agent” – legal authority to act on your behalf. If you want to have a power of attorney covering both financial and medical situations, you should prepare two separate documents.
Some people give their financial agent broad power to handle all their financial matters, but you can grant as much or as little power as you wish. For example, you may just want your agent to pay your bills and taxes, or you may authorize your agent to make investment decisions, manage your retirement accounts and hire attorneys to represent you in court. Regardless, your agent is required to act in your best interests, maintain accurate records and keep your property separate from his or hers.
An advanced health care directive empowers the agent to make health-care decisions, up to and including terminating care, not resuscitating, or "pulling the plug” on machines that may be keeping you alive. This is different from a living will, which is a written statement of a person's medical wishes, but does not appoint another person to make health care decisions.
Setting Up a Durable Power of Attorney
Establishing a durable power of attorney is easy and can be accomplished by filling out a simple form and having it signed and notarized. You may want to consult with an attorney in setting up a durable power of attorney. It is advisable to consult with an attorney to assist you in this matter.