With so many television shows devoted to survival and doomsday preparation, I thought it appropriate to discuss how families should prepare for a long-term care event. Given that 50% of people will either receive nursing home level care at home or in a facility, this kit is worth having — although I have to say that those bunkers do look real cozy.
The most essential item in every family's elder law survival kit is a Power of Attorney. It amazes us how many people come to us with a family member in a rehab or nursing home without a valid one. Just as many are trying to use one that does not authorize the Agent to do what they need to do. People do not realize that not all Powers of Attorney are created equal.
Good Powers of Attorney are surprisingly simple and complex at the same time. For example, they are simple to execute because in Pennsylvania, you do NOT need a witness or notarization for a Power of Attorney to be valid. Pennsylvania law requires only a Notice signed by the principal and an Acceptance by the Agent. That said, if you own a home and your Agent may ever want to sell it on your behalf, the Power must be recorded — and a notary is required for that purpose. We have been fighting with banks about this for so long that we now notarize and witness even when it's not strictly required, just to satisfy them.
"It is much more difficult to get a Power of Attorney signed if the client is already in a nursing home or hospital. This is an important reason why you should not wait."
Regarding names: it seems simple to get the name right — but quite often, we see Powers of Attorney where the name does not match the name on the deed, bank account, or insurance policy. And if the name doesn't fit, your document will quit. It is surprisingly common for people to draft Powers of Attorney without ever considering how they will be used and matching names accordingly.
What a bank can validly ask when a Power of Attorney is presented:
If you supply this information, the bank must honor the Power — or may be liable for the consequences. If those consequences include losing money on nursing care that could have been saved, they usually act quickly.
Regarding structure, there are two critical points. First, the Power should be immediately valid — not one that "springs" into effect only when the principal is incapacitated. A springing Power of Attorney is a ticket to an expensive, time-consuming guardianship proceeding.
Second, the Power of Attorney should name ONE agent. There should be no "successors" named unless you are prepared to prove that the primary agent is incapacitated. If you want co-agents, draft two separate Powers of Attorney — permitting either to act alone — rather than requiring them to act jointly.
Do not let the bank convince you to surrender your original Power of Attorney. The original is necessary if the Power needs to be recorded. A Certificate of Agent allows the bank to use a copy — it's a good idea to have one prepared at the time you present the Power so the bank has everything needed to honor the request.
In Part 2 of the Elder Law Survival Kit series, we tackle the specific provisions that every Power of Attorney should include — and how to ensure they are in your document.