Winter 2016 Newsletter
At Helping Hands Elder Care, we are dedicated to helping seniors maintain the highest quality of life by keeping them in the comfort of their own home. People who live at home are happier, if they’re happier they’re healthier and if they’re healthier they have a higher quality of life. This is a simple formula that leads to remarkable results and it all begins by providing our seniors with the help they need to stay at home. This Winter newsletter will address some of the technical issues families will deal with as their loved one’s age and become more reliant upon them. We get a lot of questions regarding living wills and power of attorney. So we’ll try to address the basics on both topics and although the material is dry and in some cases unpleasant it is a necessary step to take when caring for an aging loved one.
Set Up Power of Attorney for Finances
Through a power of attorney, an individual appoints a person, usually a close relative, either to help him manage his affairs, or to handle all his affairs if he's unable to do it himself. When setting up a power of attorney for finances, here's what you and the person in your care should consider:
- Determine whether theyneed a power of attorney.
A power of attorney can be used to help someone manage daily financial affairs, to take care of specific financial transactions, to handle financial affairs while they’re out of state or out of the country, or to temporarily handle matters while they’re undergoing medical treatment. Perhaps more important is the fact that, whether the person presently needs help managing their financial affairs, a "durable" power of attorney provides someone to act on their behalf if theybecome incapacitated. Without a durable power of attorney or another financial arrangement, a court may need to appoint someone to act for them if they becomeincapacitated. This court procedure is a cumbersome, time-consuming, and expensive ongoing process, and they may not have input as to who the court will appoint.
If both a husband and wife are living, each should execute a separate durable power of attorney. In some situations, it may not be necessary to prepare a durable power of attorney. Rather, another form of authority, such as a revocable living trust, can accomplish a similar result, giving another person (the trustee) authority to act. People with large estates may decide that a revocable living trust, with its important tax advantages, may be adequate for their needs. However, for the trust to effectively replace a durable power of attorney, all their present and future income and assets must be part of the trust. Or they may choose to have both a revocable living trust and a power of attorney for finances.
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- Determine who will serve as the agent and discuss the job with that person.
A power-of-attorney agent should not only be someone the person trusts and feels comfortable with but also someone with enough financial savvy to handle his financial affairs. If their finances are complex, the agent should be financially sophisticated. Also, the agent should be someone who has the time to attend to necessary financial duties and is likely to remain committed to doing so if the person becomes incapacitated and remains so for a long time. It's also a good idea if the agent lives nearby, within reasonable driving distance of the person and their property.
Regardless who becomes the agent, it's also important to consider carefully who is to be the alternate or successor agent. This is the person who would take over the job of agent if the first person named became unwilling or for any reason unable to do the job.
After the older adult has decided who the agent and successor agents should be, it's time to discuss this responsibility individually with each person they have chosen. They should make it clear to each person what handling the financial affairs would entail, and the person should give a clear commitment to take on the job if and when it becomes necessary.
- Use forms as a starting point for drafting a power-of-attorney document, and consult an attorney.
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Even though it's best to consult with an attorney before a power of attorney document is finalized, it's wise to look at power-of-attorney forms and discuss their terms beforehand. This will allow you and the person you're caring for to see different possibilities and discuss them calmly before sitting in the lawyer's office with the hourly billing meter running.
Many forms that can be used as starting points are available online, such as one from the Internal Revenue Service. You can also download state-specific samples for the state the person lives in by conducting an online search using the phrase power of attorney for finances forms along with the name of the state. There are also commercial legal form sites that can provide state-specific forms.
More than a few financial institutions, such as banks and brokerage firms, have -- and even prefer -- their own power-of-attorney forms. These can be used as models. And if the person in your care has regular transactions with such an institution, they may want to execute one of these specific forms to smooth the way for the agent. In most states, however, a financial institution is legally required to accept any power-of-attorney form officially provided by or accepted in the state.
Before finalizing a power-of-attorney document, it's a good idea to consult an attorney. You can check with the attorney about what form of authority best suits your parent or relative's needs and what limits, if any, should be placed on the power of attorney. They can also describe the chosen agent to the attorney, and even have the agent meet the attorney, to get the attorney's opinion about their choice of agent.
If they don’t already have or know of an attorney who prepares powers of attorney, they can seek a referral from a different lawyer they know, or from trusted friends or associates. They can also contact the local or state bar association where they live; these groups have information about local lawyers' specialties and can make a referral to a lawyer near their home.
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- Put the power-of-attorney document in writing, store it safely, and give it to the right people.
A power of attorney must be in writing, regardless of what form is used. No matter how often an older adult has told people what they want done and by whom, a power of attorney must be reduced to a written document and properly signed, witnessed, and notarized. However, the document usually doesn't need to be filed with the federal or state government unless it's related to taxes. If the power of attorney is to be used in connection with a piece of real estate, some states require that the document be filed at the local county recorder's office.
The person in your care should keep the original power of attorney document in a safe place and give copies to the agent and successor agents (along with information about the location of the original) and to family members and appropriate institutions such as his bank, brokerage firm, lawyer, and accountant. The document can include language stating that a copy can be accepted as the original. In some states, an attorney or a notary public needs to certify that a copy is a valid representation of the original.
- Continue to assess the power of attorney.
As a person ages or as his financial, personal, or medical situation changes, they should evaluate whether the existing power of attorney continues to be appropriate, and whether the agent they originally chose is still the right person for the job. They can change or revoke the document, including changing the agent, at any time. (You or they can go to lawdepot.com to find a sample document that revokes a power of attorney.) If they change anything, it's always a good idea to prepare an entirely new document, rather than simply marking up the existing one.
Power of Attorney Types
There are several types of power of attorney for finances:
General Power of Attorney
This document gives the agent authority in all situations (except for those specifically excluded in the document), including handling bank and investment transactions, accessing safe deposit boxes, buying and selling property, entering into contracts, filing tax returns, and managing government benefits. In some states, a general power of attorney could include creating or amending trusts during the senior's lifetime, or transferring assets into trusts. A general power of attorney lasts until a date specified in the document or, if there is no stated ending date, until the principal -- the person -- dies or revokes the document. A general power of attorney also ends when the person becomes incapacitated, unless the document is also designated as "durable" (see below). A general power of attorney does not, however, mean that the person gives up authority over his own affairs. As long as they are mentally competent, they keep authority over all their own financial decisions, with the agent acting only as an "assistant" financial manager.
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Specific Power of Attorney
This document gives an agent authority only in specific situations named in the document, such as operating a business, making gifts or donations, collecting debts, or closing the sale of a home and distributing the proceeds. The specific power of attorney remains in effect until a particular date stated in the document, until the named transactions are completed, or until the principal becomes incapacitated, dies, or revokes the document.
Durable Power of Attorney
This is the type of power of attorney that remains in effect and permits the designated agent to take care of all the person's financial affairs if and when he becomes incapacitated, either temporarily or permanently. If the person doesn't specifically designate a power of attorney as "durable," it will automatically end if he becomes incapacitated.
Springing Power of Attorney
This type of power of attorney only becomes effective at a future time or with a future event, such as when the person travels outside the country or becomes incapacitated. It used to be common for durable powers of attorney to be written as "springing" into effect only when a doctor -- or more than one doctor -- certified that the principal had become mentally incapacitated. However, the process of getting a doctor to certify that someone is incapacitated has become difficult, even when the incapacity is obvious. Also, "mentally incapacitated" is medically and legally vague, so doctors are sometimes reluctant to make that determination. It can even be difficult to get hold of someone's medical records or to have a doctor discuss his condition. For all these reasons, it's not usually recommended that a durable power of attorney be springing.
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Power of Attorney: Financial Responsibility and Considerations
Does a Power-of-Attorney Agent Get Paid?
The person giving the power of attorney decides whether the agent is to be paid. If the job is simple and is handled by a close family member, payment is not usually made, although they could choose to do so. If the job is likely to be complicated and time-consuming, or is to be handled by someone who isn't a close relative, then the agent should be paid on an hourly basis. In either case, the agent may reimburse himself for reasonable expenses.
Is a Power-of-Attorney Agent Personally Liable for the Person's Financial Losses?
Some people may be reluctant to take on the job of power-of-attorney agent because they fear legal liability -- meaning personal responsibility -- if their financial dealings result in losses. The general legal rule, though, is that an agent isn't personally responsible for financial losses unless he committed theft or other fraud, neglected normal duties (repeatedly failed to pay rent on time, for example), or made a "reckless" decision that resulted in a substantial loss (legally, "reckless" means an intentional disregard of obvious high risk, not just poor judgment).
What Makes Power of Attorney Valid
People granting power of attorney must be mentally competent when they sign the power of attorney. The process of having witnesses sign the document helps to ensure that it's authentic and that those involved are competent. Also, their signatures need to be notarized, which also adds credibility. And if they have a lawyer prepare or review the documents, the lawyer's contact with them will also back up their competence at the time.
Is a Power of Attorney Valid in All States?
A power of attorney is valid in all states. The law of the state in which they reside at the time they sign a power of attorney will govern the powers and actions of the agent under that document. However, if they regularly have financial affairs in another state -- they own property there, or have a business interest -- it's not a bad idea to have a separate power of attorney prepared with the specific legal form used in that state.
Can a Power of Attorney Be Changed?
As long as a someone is mentally competent, he can revoke a power of attorney at any time. Or he can maintain the power of attorney but change the agent. The person granting power of attorney should periodically revisit the document to determine whether it still meets his needs. If he wants to make a change, he should execute a new document rather than trying to make amendments on the old one.
Living Will:
A living will is a written, legal document that spells out medical treatments you would and would not want to be used to keep you alive, as well as other decisions such as pain management or organ donation.
In determining your wishes, think about your values, such as the importance to you of being independent and self-sufficient, and what you feel would make your life not worth living. Would you want treatment to extend life in any situation? Would you want treatment only if a cure is possible?
Have discussions with your primary care doctor, your health care agent, family and friends about your personal wishes.You should address a number of possible end-of-life care decisions in your living will. Talk to your doctor if you have questions about any of these issues:
- Resuscitation restarts the heart when it has stopped beating. Determine if and when you would want to be resuscitated by cardiopulmonary resuscitation (CPR) or by a device that delivers an electric shock to stimulate the heart.
- Mechanical ventilation takes over your breathing if you're unable to do so. Consider if, when and for how long you would want to be placed on a mechanical ventilator.
- Tube feeding supplies the body with nutrients and fluids intravenously or via a tube in the stomach. Decide if, when and for how long you would want to be fed in this manner.
- Dialysis removes waste from your blood and manages fluid levels if your kidneys no longer function. Determine if, when and for how long you would want to receive this treatment.
- Antibiotics or antiviral medications can be used to treat many infections. If you were near the end of life, would you want infections to be treated aggressively or would you rather let infections run their course?
- Comfort care (palliative care) includes any number of interventions that may be used to keep you comfortable and manage pain, while abiding by your other treatment wishes. This may include being allowed to die at home, getting pain medications, being fed ice chips to soothe dryness, and avoiding invasive tests or treatments.
- Organ and tissue donations for transplantation can be specified in your living will. If your organs are removed for donation, you will be kept on life-sustaining treatment temporarily until the procedure is complete. To help your agent avoid any confusion, you may want to state in your living will that you understand the need for this temporary intervention.
- Donating your body for scientific study also can be specified. Contact a local medical school, university or donation program for information on how to register for a planned donation for research.
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