A well-written Power of Attorney is the essential estate planning document, trumping Wills, Trusts, and Living Wills. Without a comprehensive Power of Attorney, a judge would make your healthcare decisions. Given this reality, do not download a Power of Attorney from the web or use a software provider to create one. It would be best to have a Power that addresses issues when you are disabled or confined to a long-term care facility. Powers of Attorney are “good” if they permit your Agent to do what is necessary to protect your freedom and your hard-earned assets. And the new reality is that your children are liable for your medical expenses if you cannot pay them. And this could happen even if you have money, but your Agent (the person named as your representative in your Power of Attorney) cannot access them. So a comprehensive Power that is updated to ensure access is available is invaluable for you AND your children.
Power of Attorney FAQ’s
How much does a Power of Attorney Cost? A Power of Attorney should not cost much. We are not permitted to quote prices, but generally speaking, the Power of Attorney should be priced so everyone will have one. There should not be sticker shock for these documents so that you will run to a stationary store or software program instead of having one drafted by a competent elder law attorney. And I say elder law attorney because I believe that Powers of Attorney should be done with disability and long-term care in mind, which means that certain provisions are essential and some dangerous. Unless you draft and use these daily, you may not be aware of them.
What is a Power of Attorney? Types of Power of attorney (limited, general, durable) There are two (2) general categories of Powers of Attorney – “Assets” and “Health Care.” Asset Power allows your Agent to handle your finances if you cannot. The Health Care Power permits your Agent to make medical decisions on your behalf. In Pennsylvania, this Power may be combined with a Living Will to permit your Agent to act on your behalf in end-of-life issues. Within these two categories are subcategories such as durable, special, limited, and general powers. Durable powers last beyond incapacity and can be used if you become disabled. Special powers are those like the banks give you for a particular account. General is just that – a broad-ranging power to do all things necessary to control and protect assets.
Can I combine my health care and asset Power of Attorney? A good idea for Powers of Attorney is to separate the Health Care and Asset Powers holders. Let your Healthcare Agent sign you into hospitals and long-term care facilities without binding your assets with their signature. Ensure that your Agent can deal with your healthcare provider, pension, and group benefits administrators. Failure to include this Power in your document could cost time and money when you are sick. Social Security does not honor a Power of Attorney. Luckily, much of the work you may want to accomplish with your benefits can be done online.
What mistakes should I watch out for in a Power of Attorney? Be careful about “dangerous powers.” These are things like changing beneficiaries and disclaiming assets from an estate where you are a beneficiary. If you give these powers, and many forms routinely do so, ensure you understand how they can be used. An important element that should be added is binding arbitration. Nursing homes routinely want this added to their agreements to avoid jury trials. It would be best to consider a clause in your document that prohibits your Agent from agreeing to this.
Can I get a Power of Attorney from Staples or Office Depot? Sure, you can get one, but generally, these vague and very general documents are not tailored for elderly clients and may only be good enough to hire a real attorney to draft a real document.
The Nursing Home is offering to make a Living will for me. Is that OK? I would say to be careful about this. It is one of the most important documents and one of the most important conversations you should have with your family and doctor. Having a form thrown in front of you for the convenience of the nursing home is not how this should be addressed.
Why do I need a Power of Attorney? There is one thing I always tell clients about their estate planning – it is nice to have a Will, but it is essential to have a Power of Attorney. While I do not advocate not having a Will, in many cases, not having one does not change much for our clients. Most married clients have everything in joint names, and their spouse is the beneficiary of their life insurance and IRAs. For single individuals, intestate law will sometimes suffice as a Will substitute. I do not advocate this if you have younger children or children from a previous marriage or are single with no children but have an aging client.
The bank won’t honor my Power of Attorney, what can I do? The bank has to honor a POA presented to them unless they know that it is being used to the detriment of its depositor. They may request an Affidavit that the POA is in full force and effect and that the depositor is still alive and does not have a Guardian, but that is all they can ask for. Many banks think they can review the document and require originals, witnesses, and notarizations, but they can not. A letter from someone who knows the law will suffice to get them to act. In their defense, there has been a lot of abuse using POAs, and banks are more than a little nervous about honoring them.
What is a good Power of Attorney? What makes a “good” Power of Attorney? Well, it should be executed correctly. A Power of Attorney must not be witnessed or notarized in Pennsylvania to be effective. However, if you own real estate, you should have it notarized to be recorded. Also, you can only record an original Power of Attorney. Copies cannot be used to record a Deed. Therefore, you should do at least three (3) originals when you prepare your Power. If you have a property in another state, ensure that the state’s requirements are satisfied in your Power. Make sure that your properties are referenced specifically in the documents. Failure to properly identify your real estate could be problematic in some states.
Do I need a notary to witness a Power of Attorney? Not unless you cannot sign your name.
Does a Power of Attorney permit me to make gifts to myself? Another important issue is gifts. Pennsylvania law states that unless you are specific about gifting, then gifting is limited. If you do not grant your spouse unlimited gifting, it could interfere with your ability to obtain medical assistance, requiring all assets to be titled in the name of the healthy spouse. If your children are your agents, you may wish to permit them to perform Medicaid planning on your behalf by transferring funds to a Trust or to carry out planning that could provide you with more flexibility in care. You may want to indicate that your prior gifting and estate planning need not be followed in an emergency. Make sure that the name on your Power matches the name on your Deeds. If the names don’t match, it may make the Power ineffective for recording a Deed.
Can I access health care records with a Power of Attorney? Yes, you should be able to with a good Power of Attorney that waives H.I.P.P.A. rules. And what about a good Power of Attorney for Health Care? We have been moving to a document that follows the law and names an Agent to act on your behalf. Choose a good Agent, and you will not have to list every possible medical condition or illness you may have. Most medical decisions are not clear-cut. We think the best thing to do is choose your Agent wisely and provide your Agent with the latitude to weigh all of the facts and make a decision that your Agent believes would be made if you had the Power to do so. Make sure your Agent knows what you want. Don’t be afraid to talk about these issues. Talking about them does not mean that they will happen. Just like doing a Will does not mean you will die any sooner.
Can I use a Power of Attorney for Social Security? Social Security will not honor a Power of Attorney and prefers that you name a Representative Payee.
Can I use a Power of attorney for V.A.? V.A. has a separate form for naming an Agent for a veteran.
Who can act as my Agent under Power of Attorney? Generally, any adult may act as an Agent, bank, or car dealer. For Powers of Attorney for long-term care needs, be very careful about naming someone you Trust with all of your assets because they have all of the Power of the assets you have as principal. If you are still competent to handle your affairs, you can keep the POA in the file to be executed by the Agent at the time it is needed.
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The Elder Law Attorneys at Shober and Rock represent clients with a wide range of needs. Call (215) 345-4301 today to consult with our experienced Powers of Attorneys Lawyers.
