I tell my husband to get the laundry out of the dryer; I remind him of an appointment for the billionth time this week; I ask him to pick up milk on the way home; we discuss our schedules; we talk about our plans for the weekend or work or what's going on with friends and family; we laugh about something silly the Boys said or did; we exchange "I love yous"; and we go through each day to next to the next. Such is life, right?
Life can be lived only one day at a time, but we must also think ahead and plan for the future. While discussing the "what ifs" of comas and life support and funeral arrangements and organ donation and long term financial issues in case of a tragedy are not my idea of romantic date night conversations, it is necessary and important to talk about these issues.
Not only do we need to talk about them we need to get your thoughts down in writing/on forms, signed, witnessed and/or notarized or whatever makes these documents legal and binding in your state. This is true whether you are a single parent or married couple with kids or a divorced parent or a grandparent raising a grandchild or unmarried parents or simply single or a married couple without kids; you should get these documents in order.
Powers of Attorney
Some of these important documents are called powers of attorney. There are several kinds of powers of attorney. This is a confusing area for many because they don't understand the differences between the various powers of attorney or don't realize they many need more than one until there is a health issue.
Black's Law Dictionary, 9th Edition defines a power of attorney as "an instrument granting someone authority to act as agent or attorney-in-fact for the grantor." Basically, a power of attorney gives a person the power to act for and make decision for another. A power of attorney is useful when dealing with health care issues, end-of-life decisions and financial issues.
Normally a power of attorney goes into effect at the signing, can be revoked and expires at the death or incapacitation of the grantor. Of course, that's not what you want when you are making estate planning provisions for the future. There are powers of attorney that don't terminate if/when the principal becomes incompetent. This is called a durable power of attorney.
Some states require that a document specify its durability; other states allow a power of attorney document to imply its durability. A durable power of attorney can go into effect on the date signed or at the time of a specified time or event in the future.
Here are a few other types of powers of attorney:
-
Irrevocable power of attorney can't be revoked by the principal;
-
General power of attorney authorizes the agent to transact business for the principal. The general power of attorney is very broad, giving the agent a great breadth of power in handling business affairs for the grantor;
-
Special power of attorney authorizes the agent to transact business limited to a specific topic. That is, the agent has authority to handle a particular business transaction, such as the sale of a property or manage a specific business interest.
Any of these types of powers of attorney can be durable, depending on the provisions of the document.
Powers of Attorney for Healthcare and Finance
It's important to realize there is a difference between a healthcare power of attorney and a finance power of attorney. It's advisable to have both documents. The financial power of attorney won't allow the agent access to the grantor's medical records or allow the grantor to make medical care decisions. At the same time, a healthcare power of attorney won't give the agent access to account information or allow the agent to act on behalf of the grantor when it comes to paying bills, buying or selling property, etc.
A power of attorney for healthcare is very important should the grantor become incapacitated. Regardless of the relationship, without a power of attorney for healthcare, the medical staff won't discuss medical procedures, allow access to the records or permit anyone to make decisions for the patient. This is often surprising to spouses of patients.
Choosing an Agent
A person does not have to choose the same person to be named as the agent for both the power of attorney for healthcare and the power of attorney for finances. Generally, the person named as the healthcare power of attorney is a spouse or child or other close family member. The finance power of attorney may also be a close family member, but it can also be a trusted friend, business associate or professional, such as an accountant or lawyer.
Before executing these documents it's important to talk with the person chosen as the agent to ensure that person is willing and able to serve in that capacity. A friend or family member will serve without compensation, but a professional will more than likely charge a fee to fulfill that role.
In order to ensure that the agent(s) make the best decisions when it comes down to your health and financial interests, it's vital to provide the agent with as many tools as possible that indicate your wishes in these matters. A living will is an excellent document for the agent with a healthcare power of attorney. And clear records and organized documents are much help to a finance power of attorney.
The Scoop
The key point to take away from this week's posts is that talking about and planning for the future, in regards to both finances and healthcare/end-of-life decisions, is the first step to estate planning. As always, the best way to go about making these arrangements and executing these documents is to talk to a lawyer. If you can't afford to do that, then find the appropriate forms/requirements for your state and get the powers of attorney, living will, etc. executed. Over and out...
Anna
Comments