General Durable Power of Attorney and Health Care Power of Attorney: What You Need to Know
When planning for the future, establishing a power of attorney (POA) is a critical step to ensure your affairs are managed according to your wishes if you become unable to make decisions yourself due to disability or incapacity. Two common types of POAs are the General Durable Power of Attorney and the Health Care Power of Attorney. Understanding the differences between these two can help you make informed decisions and ensure comprehensive planning. In this article, we’ll explore what financial and medical powers of attorney are, their key differences, and why you need both.
What is a General Durable Power of Attorney?
A General Durable Power of Attorney is a legal document that grants someone (the agent or attorney-in-fact) the authority to manage your financial affairs if you are unable to do so. This can include a broad range of activities, from paying bills and managing investments to filing taxes and selling property. If you have a Revocable Living Trust, it may have similar provisions in it, so depending on your assets and how you have them titled, a General Durable Power of attorney may or may not be a more critical complement to your estate plan.
Key Features
- Scope of Authority: The authority granted can be broad or limited, depending on your needs. You can specify which financial tasks the agent can perform.
- Durable or Non-Durable: A Durable POA remains in effect if you become incapacitated, whereas a Non-Durable POA does not.
- Springing or Immediate: A Durable Power of Attorney can be active immediately or it can be “springing”, meaning it “springs to life” when you are incapacitated, but until that time is inactive. Some states (like Florida, for example) do not allow springing powers of attorney. Tennessee does allow them.
- Revocation: You can revoke the General Durable POA at any time, as long as you are mentally competent. Your attorney and in many cases also your doctor will make that competency determination together. Your attorney must be reasonably certain that clients fully appreciate the legal decisions they are making before drafting or changing any legal documents for them.
Responsibilities of the Agent
- Managing bank accounts and paying bills
- Handling investments and retirement accounts
- Filing and paying taxes
- Collecting Social Security, Medicare, or other government benefits
- Buying or selling real estate or other property
- Managing business interests
What is a Health Care Power of Attorney?
A Health Care Power of Attorney, also known as a Health Care Proxy or Durable Power of Attorney for Health Care, allows you to appoint someone to make health care decisions on your behalf if you are unable to do so. This can include decisions about medical treatments, surgeries, medications, end-of-life care, and disposition of remains.
Key Features
- Scope of Authority: The agent can make a wide range of health care decisions, including consenting to or refusing medical treatments and choosing health care providers.
- Activation: Typically, a Health Care POA becomes effective only when you are incapacitated and unable to communicate your health care decisions.
- Revocation: You can revoke the Health Care POA at any time, as long as you are mentally competent.
- Revocable Living Trust Integration: Often, a Health Care POA is used in conjunction with an Advance Health Care Directive, which provides specific instructions about your end of life preferences.
Responsibilities of the Agent
- Making decisions about medical treatments and procedures
- Deciding on long-term care and rehabilitation services
- Accessing medical records and communicating with health care providers
- Making decisions about life-sustaining measures, such as resuscitation and mechanical ventilation
Key Differences Between General Durable and Health Care Powers of Attorney
While both types of POAs serve to protect your interests when you are unable to make decisions yourself, they focus on different aspects of your life.
Scope and Focus
- General Durable POA: Concentrates on managing financial and legal matters.
- Health Care POA: Focuses on health care and medical treatment decisions.
Activation
- General Durable POA: Can be immediate or springing, depending on your preference.
- Health Care POA: Typically becomes effective only when you are deemed incapacitated.
Revocation
- Both types can be revoked at any time, provided you are mentally competent.
Choice of Agent
- General Durable POA Agent: Should be someone you trust with your financial affairs, often a financially savvy individual.
- Health Care POA Agent: Should be someone who understands your health care preferences and is comfortable making potentially difficult medical decisions.
Why You Need Both
Having both a financial and medical power of attorney ensures comprehensive coverage of your needs. Each addresses different areas of your life and together, they provide a holistic approach to managing your affairs in case of incapacity.
Benefits of Both
- Comprehensive Management: Ensures that all aspects of your life, both financial and medical, are covered.
- Reduced Burden on Loved Ones: Provides clear guidance to your loved ones and health care providers, reducing stress and potential conflicts.
- Peace of Mind: Knowing that trusted individuals will manage your affairs according to your wishes brings peace of mind.
How to Establish Powers of Attorney
- Reflect on Your Needs: Consider your specific needs and preferences. Determine who you trust to handle your financial and medical decisions.
- Choose Your Agents: Select individuals who are trustworthy and capable. Discuss your expectations and ensure they are willing to take on these responsibilities.
- Consult an Attorney: Consult with an estate planning attorney to ensure your POAs meet legal requirements and align with your overall estate plan.
- Complete the Necessary Documents: Work with your attorney to draft and sign the POA documents. Ensure they are witnessed and/or notarized if required by your state.
- Distribute Copies: Provide copies of the POAs to your agents, family members, and relevant institutions, such as banks and health care providers.
Establishing a General Durable Power of Attorney and Health Care Power of Attorney are crucial steps in ensuring your affairs are managed according to your wishes if you become incapacitated. By understanding the differences between these two types of POAs and taking the necessary steps to implement them, you can protect your interests and provide clear guidance to your loved ones. Consult with an estate planning attorney to create a comprehensive plan that covers all aspects of your life and offers peace of mind for the future.