What is a POA and Who is Entitled to One?
While many estate planning documents focus on what becomes of your property after you die, other critical documents provide for who should be responsible for your healthcare decisions, property, assets, and obligations when you are alive but unable to do it for yourself.
How Does a Power of Attorney Work?
To designate someone to handle these types of responsibilities, you will want to have a power of attorney. Appointing a power of attorney allows someone other than yourself to make important decisions on your behalf, including financial and medical decisions for you.
Unfortunately, without a power of attorney, your family may be left to have the court appoint someone to handle these matters for you. Having a power of attorney designated ensures that you make this decision for yourself and elect someone you can have trust and confidence in.
What Rights Will Your Power of Attorney Have?
Depending on the type of power of attorney, this person, otherwise known as your agent, can have the right to make decisions regarding
- Your healthcare, including ongoing care, diagnostics, and whether to continue or discontinue medical treatment
- Selecting and hiring your doctors or caregivers
- Any long-term medical care arrangements
- Opening a lawsuit on your behalf and signing the necessary paperwork
- Making personal, business, or other financial decisions on your behalf
- Opening bank accounts, paying obligations, and selling property on your behalf
- Buying, selling, and managing your investments
- Negotiating contracts on your behalf
- Receiving income on your behalf
- Purchasing life insurance on your behalf
And other matters as they may arise.
Financial Power of Attorney
You can have more than one individual handle different responsibilities with different powers of attorney. A financial power of attorney will delegate responsibility for financial matters to your agent. In California, there are three types of financial powers of attorney:
- General power of attorney - A general power of attorney grants the most rights to your agent, giving them the same authority as you would have to make financial decisions.
- Limited power of attorney - A limited power of attorney allows you to specify which decisions your agent will have responsibility over.
- Durable power of attorney - In order for a power of attorney to remain in effect in the event of incompetency or incapacity, it must be made durable. Both general and limited powers of attorney can be made durable to enable your agent to make decisions if you are no longer capable of doing so due to incapacity.
Medical Power of Attorney
A medical power of attorney will name an agent to make healthcare decisions on your behalf. In California, your agent will have the authority to make decisions concerning your healthcare, medical treatment, and any end-of-life decisions, and the power of attorney will become part of your advance healthcare directive.
More than one person can have power of attorney, but naming more than one agent can create some confusion, especially with sensitive medical decisions. One exception to this, however, is when a couple is elderly and has named the other spouse as their agent. In this case, it is often a good idea to have an alternate agent to step in if necessary.
Who Should You Name as Your Agent?
Because your agent has incredible responsibility toward you, choosing the right individual to act as your agent is critical.
Many people will select a spouse, child, another relative, or close friend, but you may name anyone you want as your agent. It is important to remember, however, that it is not just about your connection to that person and their adherence to your wishes but their ability to handle important matters if you are unable to do it.
Whether your agent will be working under a medical power of attorney or a financial one, you will want to designate someone who
- Lives geographically close by – Especially if yours is a medical proxy, you will need someone close enough to your hospital, doctors, or other medical care centers to be effective in an emergency.
- Is assertive – Being an agent for someone can be a difficult task, especially making the important decisions. Your agent should be able to fully consider your wishes, make decisions in your best interest, and communicate this effectively despite any pressure around them.
- Is trustworthy – Your agent should have the character and values needed to hold this responsibility. You are relying on this individual to work on your behalf, so it should be someone who has proven that they can be counted on.
- Is someone who can understand complex financial or medical issues or can do the needed research – The decisions that your agent is responsible for can often be complicated, either financially or medically. You will want to choose someone who has the capacity to understand complex matters or has the tenacity to do the research involved to make knowledgeable decisions.
Getting Critical Legal Advice
Before signing a power of attorney, it is helpful to get the guidance of a skilled estate planning attorney to discuss your needs and the responsibilities and rights of your agent.
At the Law Offices of Roshni T. Desai, our Orange County estate planning lawyers will discuss all these considerations to ensure that your power of attorney is comprehensive and that you have made the right decision regarding your agent. To schedule a consultation to discuss any of your estate planning questions, call us at (714) 694-1200 or contact us online.