A Beginner’s Guide to Power of Attorney for Elderly Parents

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As a loved one ages, it can become a struggle to balance respecting their autonomy with protecting them from the negative consequences of their mental or physical health problems. A power of attorney, or POA, is one way to help ensure that your loved one’s wishes will be prioritized no matter what happens down the road. A power of attorney is one of the most important documents for elderly parents, but it’s one that many families haven’t prepared. Fortunately, setting up a power of attorney is fairly simple, and doing so can save both aging parents and their families from future complications.

Key Takeaways

  1. A power of attorney (POA) document gives a person the ability to act on another’s behalf. An elderly parent, the “principal,” may name an adult child as their “agent.”
  2. POAs are often created to designate an agent to make financial and medical decisions. In the event that a senior becomes incapacitated, an agent can make health and financial decisions in the seniors best interest.
  3. POAs can be general or limited. A general POA can cover a variety of matters, while a limited POA may cover a specific act, such as selling a home or car.
  4. A POA cannot be signed by someone who is mentally incompetent. It’s important to consider setting up a POA before a parent faces a health decline.

What is a power of attorney?

A power of attorney (POA) is a legal document that authorizes a designated person (the agent or attorney-in-fact) to act on behalf of another person (the principal). A power of attorney can help ensure that a senior’s wishes will be carried out in case of an emergency or if they become incapacitated and can’t manage their own affairs.

“Start early. Plan ahead, and don’t wait until things are tough.”

– Linda Cloutier-Namdar on when to create a power of attorney

How to get power of attorney for an elderly parent

A power of attorney can’t be created for or “over” someone else. The principal is the person giving the power to act on their behalf and must initiate the creation of their POA. The principal must be mentally competent at the time of signing for the POA to be valid. Therefore, an adult child can’t create a power of attorney for their parent and name themselves the agent without the parent’s permission.[01]

How does a power of attorney work?

Because a power of attorney grants a chosen agent (typically an adult child, relative, or trusted friend) the ability to make important decisions for the principal, the agent is legally obligated to act in the principal’s best interests. This is known as a fiduciary duty.

Additionally, the type and timing of an agent’s authority is dependent on the language in the document itself. The following section provides more details on the different types of power of attorney.

The four types of power of attorney

The most common types of power of attorney are general, limited, durable, and springing. Seniors choose the option that best fits their specific medical and financial needs, usually under the advisement of an elder law attorney.[02] It’s important to note that some types of POA are not available in all states.

  • general power of attorney gives a senior’s agent power to act on their behalf on a variety of matters, such as making health care decisions, signing documents, and paying bills. Powers are typically separated into different powers of attorney. For example, an agent who’s been appointed medical power of attorney can only make medical decisions for the principal.[03]
  • limited power of attorney means a senior can give someone power over specific matters, which are stipulated in the document. In other words, an agent’s decision making power is limited to what is stated in the POA. For example, if a senior resides in a nursing home and wants to sell their home, they can specify in their financial POA that they only grant their agent permission to sign real estate documents on their behalf.
  • durable power of attorney goes into effect when the document is signed and remains valid until the principal revokes the document or dies. Unlike a nondurable power of attorney, a durable power of attorney will remain valid even if the principal were to become incapacitated.
  • springing power of attorney is designed to take effect only when specific conditions outlined in the document are met. Examples could be if the principal were to become incapacitated due to an illness or accident. Seniors who want to maintain their autonomy may prefer a springing power of attorney. However, this type of POA can cause delays and complications if determining the principal’s capacity is unclear or can be easily contested.

As illustrated above, choosing the type of power of attorney that best fits one’s needs is not simple. However, not preparing a POA can potentially create an even more complicated situation. If a senior were to become incapacitated without having a power of attorney in place, their adult child would have to go to court and petition for guardianship or conservatorship before they could legally take care of their parent’s affairs. This process is notoriously long, complicated, and expensive.

The benefits of a power of attorney for aging parents

A power of attorney can help your senior loved one dictate their care and the management of their finances if they become unable to do so. Most families hope they’ll never have to use the POA, but it should be created as a safeguard. Knowing that someone you trust understands your wishes and can act on them is invaluable.

“The most obvious scenario is when you become incapacitated or start to decline mentally,” says Chad Holmes, the founder of financial planning firm, Formula Wealth. “Having someone to make medical and financial decisions for you is so powerful. The POA can help make sure your bills are paid on time, your taxes are filed, your medicine is ordered, your required minimum distributions are completed, your doctor’s notes are followed, and so much more.”

However, a power of attorney offers benefits for family members as well. Knowing that you have the power to step in and help a senior loved one can help create a sense of empowerment to act instead of feeling overwhelmed.

A power of attorney can also help to provide clarity for families around who is responsible for making certain decisions. It can help create a communication structure among siblings and other family members as they work together to address their senior loved one’s needs.

Linda Cloutier-Namdar, who worked with A Place for Mom to find care for her parents, explains that the power of attorney has encouraged an open dialogue among her and her siblings regarding their parents’ care. She and her brother share power of attorney duties.

“When there’s been a concern, conflict, or question raised by a sibling, we bring it to our parents and say, ‘We want to make sure you hear it but also, give us guidance.’ And my father has said over and over, ‘You are doing what we asked you to do.’ We really are a team. There are definitely benefits to doing it and to see your parents well cared-for is key.”

When to set up a power of attorney

Experts and families recommend establishing a power of attorney before it’s needed.

“Start early,” Cloutier-Namdar urges. “Plan ahead, and don’t wait until things are tough.”

A power of attorney can provide seniors with more control over who manages their care and finances. It should be viewed as a supportive tool rather than a surrendering of independence.

Seniors may consider the following common reasons for creating a power of attorney:

  • Alzheimer’s disease or other dementia diagnosis. According to the Alzheimer’s Association, the number of Americans living with Alzheimer’s is growing rapidly.[04] To plan for the possibility of one day developing dementia. It’s vital to set up power of attorney documents before cognitive decline is significant. Executing legal documents can become difficult or impossible once a senior is deemed mentally incapacitated.
  • Difficulty with financial responsibilities. If your aging relative has a hard time staying on top of financial obligations, they may consider creating a power of attorney to allow an adult child to handle finances for them. This added support can come in handy, even if cognitive decline isn’t an issue.
  • Upcoming surgery. Invasive procedures, such as a hip replacement surgery, can lead to complications and require extended recovery times.
  • Planned travel. A power of attorney can also be established for convenience. If seniors are traveling, they may want to authorize someone to cash checks, handle bills, or oversee emergencies in their absence.
  • Medical diagnosis. A senior with a serious or terminal diagnosis may want to establish a power of attorney to help ensure their wishes are met if they become incapacitated or too sick to make decisions on their own.
  • Unstable family relationships. Adult children may disagree about a parent’s care, resulting in family disputes about finances or end-of-life decisions. A power of attorney legally designates who is responsible for making which decisions on their behalf.

How to get a power of attorney

Creating a power of attorney is generally broken down into the following steps:[03]

  1. Choose an agent. This is usually a family member or friend, but it’s important to make sure the person is trustworthy, capable of managing the tasks, and reliable. Discussing expectations and responsibilities with them ahead of time is crucial.
  2. Draft the POA based on the principal’s needs. Some families may choose to do it themselves using forms or templates available online. Consulting an attorney is highly recommended. A legal professional can ensure the terms of the document clearly reflect the principal’s wishes, which will minimize the likelihood of issues down the road.
  3. Sign and execute the document. Once the power of attorney is signed, it becomes legally binding, but states have different rules around signing. For example, some states require multiple witnesses and a notarized signature for the document to be considered valid.
  4. Maintain the document. A principal should meet frequently with their agent and their attorney to review the document and ensure it still meets their needs. In certain cases, it may make sense to revoke an existing POA and draft a new one.

Remember, if your aging loved one needs to create a power of attorney, they’ll need to voluntarily initiate the process above.

The interpretation and implementation of powers of attorney may vary between states. State-specific questions about how power of attorney works may be answered by a local elder law or estate planning attorney. The National Academy of Elder Law Attorney’s Find a Lawyer tool can help you find a local professional to assist with legal preparations.

How to choose an agent for a power of attorney

Choosing an agent can be one of the more challenging parts for an aging parent when creating a power of attorney. An agent should be someone with whom the principal has a good relationship.

It’s important to look for the following characteristics when considering a potential agent:

  • Trustworthiness
  • Clear communication skills
  • Assertiveness
  • Proximity to the senior
  • Specialized medical or financial knowledge
  • Ability to manage and execute power of attorney responsibilities

 

Naming more than one agent

A senior can choose multiple agents for a power of attorney but don’t typically name more than two.

For example, Linda Cloutier-Namdar and her brother were both named as agents on their parent’s power of attorney. This became a matter of convenience when her parents moved to another state. As an agent back in their home state, Cloutier-Namdar was authorized to handle selling her parent’s home, saving them the inconvenience of having to fly back and forth.

Having multiple agents named on a power of attorney typically requires strong communication and understanding among agents to ensure decisions aren’t delayed or misrepresented. It’s possible for the principal to grant different powers to each individual agent or to allow them equal powers on all matters. Principals can also require agents to make decisions cooperatively or independent of one another. Planning ahead and setting clear expectations is essential when naming multiple agents.

Naming a successor agent is also something to consider. This offers an extra layer of protection if the original agent either can’t or is unwilling to serve as the agent.

When does power of attorney expire?

A power of attorney will always expire upon the death of the principal.

The following are examples of other circumstances under which a power of attorney document is no longer valid:

  • The principal, who is mentally competent, chooses to revoke the power of attorney.
  • There is an expiration date written into the document.
  • The conditions or stated time limit of the document have been met, like those outlined in a limited power of attorney.
  • The principal becomes incapacitated and had a nondurable power of attorney.

How to ease family tensions over power of attorney decisions

Tense sibling relationships or strained parent-child dynamics may complicate conversations around POA decisions. Sometimes, adult children can feel hurt or jealous knowing their parent has named another sibling as their agent. However, that doesn’t have to be the case.

An elder care planning meeting can be a good forum to discuss power of attorney expectations with your family. They can help determine how each member of the family can contribute to the care of a senior loved one. The following tips can also help to make the planning process more peaceful and harmonious.

Actively listen

Taking time to listen to an elderly family member’s questions and concerns can promote buy-in to the decision making process.

Understand that strong emotions related to the aging of a parent or grandparent may cloud a person’s judgment. Try to understand each family member’s perspective and how it might shape concerns around long-term care.

Address concerns directly

Clear communication that addresses lingering questions about a power of attorney helps reassure family members and prevents future conflicts. Some families may want to consider using a mediator to lead discussions. Guided conversations may be more productive to effectively explain the role of each family member.

Be respectful

If your parent has chosen you as their agent, you may face questions from other relatives or friends about this situation and your decisions. Thank them for their concern and feedback, regardless of how it aligns with your chosen course of action. Maintaining positive relationships provides a supportive circle for both you and your parent.

This article originally appeared on APlaceForMom and was syndicated by MediaFeed.

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