General Durable Power of Attorney
This allows someone else to function as you during your life to make legal and financial decisions.
You are literally handing them the keys to your kingdom. They can transfer your house or protect it with a deed, engage in Deed Planning, or transfer, buy, sell property for you. They also can operate your bank, investment and retirement accounts as if they were you.
But people say all the time, ‘That’s okay, I’m a beneficiary on that.’ Think about this. A beneficiary on a life insurance policy has zero access to the policy itself. The beneficiary cannot call up and change the policy. It is the same for an IRA, (Individual Retirement Account). By definition, it’s an individual account, not a joint account. The beneficiary has no rights to operate that account at all.
Why so important? With a General Durable Power of Attorney, when someone passes away, it ceases to exist. You can’t go to the bank and operate the bank or retirement accounts. So what document picks up?
The Will. The Will names an executor, (hopefully several), but not co-executors. If I wanted my wife to handle it, but she couldn’t for whatever reason, then another trusted individual, perhaps my son would be my secondary executor. I may even have a third.
Some Power of Attorney documents do not allow the Attorney in Fact to gift or move money to themselves. That could handcuff your spouse from activating a benefit or planning properly if you were incapacitated and needing long term care. That would force a spend down.
With a Will, you also want substitutes for the executor, a person you trust to execute the Will under the Clerk of the court.
The courts make sure the executor carries out your wishes and the money and property are distributed according to your wishes.
– Wills only have power when someone passes away. To access accounts, you must probate the Will, and apply the letters of probate to be named in the executor.
– People rely on Wills to pass property. If they need long term care, that could necessitate Medicaid paying for it. In that case, Medicaid liens attach during probate and force the sale of the home.
That is how people lose their money and property.
Healthcare Power of Attorney
A Healthcare Power of Attorney needs a HIPPA designation allowing your appointee to handle your healthcare.
They should be able to:
– Pull your medical records
– Transfer them from place to place
– Do whatever you can do with regards your healthcare, including life or death, long term care and pain management decisions for you.
Again, have substitutes to replace the primary if they cannot fulfill the position.
Why should you have a Healthcare Power of Attorney?
The Attorney in Fact must be capable of making the right decisions at the right time for the benefit of you. This way, there aren’t multiple voices giving opinions. It’s easier for healthcare providers to do their job consistently and with continuity of care if there’s only one voice to listen to. Otherwise they may have to choose between differing opinions of a brother and sister.
A Living Will, (The Declaration for a Desire for a Natural Death) should clearly communicate with the Healthcare Power of Attorney.
The Healthcare Power of Attorney should state, if there is conflict between your Living Will and what the designated Attorney in Fact says, the human element should win. The document should say that to avoid conflict.
– There are some fill in the blanks Healthcare Power of Attorney and Living Wills, but I don’t recommend them. When you’re appointing someone to manage your life and death decisions, take time to carefully draft that document. Don’t leave blanks open to be filled in by anyone.
– Many religions have specific guidelines about end of life events. You don’t want conflict here either.
Example: A Catholic Living Will should be written differently than a generic Living Will. You want the eucharist and last rites performed. You also want it clear when to with-hold live saving procedures and why, so to avoid complications with suicide.
By drafting these documents individually, you consider who the person is and their beliefs.
I believe a General Durable Power of Attorney is the must have while you’re alive, but I suggest having all four foundational documents in place.
Elder Law Attorney
McIntyre Elder Law
123 W. Marion Street
Shelby, NC 28150