January - February 2018

Written by Chad Eichorn
From his column Elder Law

images/news/2018/elder-law-03-18_article“Every person is different, and when it comes to estate planning every person’s needs are unique.” I often say these words when I talk to people about estate planning. However, it is also only mostly true. While each person’s needs are unique, every adult, in every circumstance, should choose someone to be their alternative decision-maker in case they become disabled. This is done by creating a simple document called a power of attorney (POA). Today, let’s consider what a POA is, what it does, and why you really need one.

A POA document nominates someone you trust (an agent), to make decisions on your behalf if you become incapacitated. Usually, it comes in two varieties: a Financial POA and a Health Care POA. A Financial POA gives your agent the ability to help manage your financial affairs, including banking, investments, benefits, taxes, etc., if you can’t. A Health Care POA gives your agent the authority to make medical and end-of-life care decisions on your behalf. Often, Health Care POA documents include a Living Will (aka Declaration Regarding Life-Sustaining Procedures), and a HIPAA release, which gives medical personnel and hospitals permission to share your otherwise private health information.

“So, Chad, why does everyone need POA documents in place?” I’m glad you asked. If you become incapacitated either by injury, illness, or other circumstances, and have not created POA documents, no one can step in to help you without court intervention.

Every adult, in every circumstance, should choose someone to be their alternative decision-maker in case they become disabled.

I have seen many situations where families had to wait weeks following a catastrophic event to appear before a judge to remove life-sustaining procedures. I have seen wives who had to create costly legal conservatorships over their spouse, because their husband’s retirement account was held individually instead of jointly. The funds were needed to provide medical care, but the husband lacked the capacity to name his wife as agent. I have a hundred stories of disasters that could have been avoided with a simple POA.

Your Financial POA and your Health Care POA do not have to be the same person, but you should be extremely careful in who you select. Your Health Care POA should be someone who understands your wishes and can be trusted to make a difficult decision regarding the end of your life. If you think someone might suffer long-lasting guilt for removing your life support, he/she is probably not the right agent. Your Financial POA must be someone you trust completely with your finances. A banker recently told me that people don’t rob banks with guns anymore; they rob them with POA documents.

Relatives may serve as your POA; however, if you are thinking about nominating one of your children, consider how well they get along with your other children. I’ve been involved in many family fights resulting from interpersonal conflict among siblings.

Assuming you carefully select the right agent, there is no reason not to have a POA. Unlike some other estate planning tools, POA documents are inexpensive. In most states you can download them from either the state Bar Association website or the state Judicial Branch website—at no cost. However, it’s a good idea to have an attorney review it with you to make sure you completely understand what you’re signing.

Having valid POA documents that name the right person as your agent will prevent more crises than any other legal planning you can do. It is PRIORITY #1!

Chad Eichorn is an attorney licensed in Iowa only. This article is provided as legal information only and is not intended as legal advice. If you have questions regarding your specific situation, please contact an estate planning and elder law attorney licensed in your state of residence.