Durable Power of Attorney for Healthcare Decisions Risks: Parents

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Legal Risks of Appointing Children as Durable Power of Attorney for Healthcare Decisions

Appointing children as durable power of attorney for healthcare decisions poses risks for adult children and aging parents. Being a healthcare agent can mean being involved in heart-wrenching health-related decisions while navigating complicated family dynamics.

The role of a durable power of attorney for healthcare or finances is a fiduciary responsibility. If you are a parent appointing an adult child, or a child accepting this role, it is crucial to understand the high level of responsibility you grant or accept, as well as the unexpected events that can occur.

Poor decision-making, inattention to detail, or a lack of experience can lead to disastrous, life-affecting situations for an elderly parent. Equally risky is using standard documents that do not provide the necessary safeguards to ensure the wishes of aging parents are prioritized, the actions of agents are transparent, and unnecessary intrafamily battles are avoided.

Fiduciary Definitions and Duties

What is a fiduciary? What are the duties of a fiduciary power of attorney agent?

In simple terms, a fiduciary is a person who accepts a strict legal and ethical obligation to act in the best interests of the principal. A durable power of attorney agent for healthcare or financial matters is a fiduciary and has a fiduciary duty.

The principal is the individual who appoints the fiduciary. In the following examples shared by Pamela D. Wilson, an elderly mother or father is the principal, and the agent is an adult child.

If you are a healthcare agent or a principal, you can learn how to anticipate, plan for, and prevent unexpected events that happen due to a variety of unknown circumstances.

While elder law may seem complicated, gaining knowledge is the key to avoiding future issues in your family. Being transparent in families ensures that everyone, parents and children, are clear on wishes and expectations today and in the future.

This includes deciding whether you will appoint one child as a durable power of attorney or appoint children as co-agents.

State Specific Definitions

To provide context, a list of duties for a Colorado power of attorney agent can be found in Colorado statute 15-14-711 Agent’s duties (p 426-427).

Many states have statutes or acts that provide detailed information on the powers and responsibilities of agents, which principals and agents should familiarize themselves with to avoid surprises. This information can be found on many state government websites by searching the Internet for the name of a state plus “power of attorney statute” or “power of attorney act.”

• If you are an agent and you don’t know the requirements of your position, not knowing is not a defense when this information exists in the executed document and online.
• If you are a principal and you don’t understand your rights to direct your agent, you can be at a disadvantage if or when your agent fails to act according to reasonable expectations.

What is Breach of Fiduciary Duty?

A breach of fiduciary duty in durable power of attorney healthcare decisions means the named agent has failed to fulfill their legal and ethical duties to the principal. Breaches of fiduciary duty include any of the following that result in harm or injury to the principal or the principal’s property:

• Self-dealing where a fiduciary profits personally at the beneficiary’s expense
• Filing to disclose competing personal interests, also known as having a conflict of interest
• Violating the duty of care and loyalty
• Inappropriate sharing of confidential information

What are the Legal Risks for Elderly Parents Who Appoint Children as Power of Attorney Agents?

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Duty of Care

Let’s look at a duty-of-care example that could raise concern if this situation repeats or is part of an ongoing pattern in durable power of attorney healthcare decisions.

A daughter with durable power of attorney for healthcare visits a parent on a lunch break and witnesses Mom fall. Mom can’t get herself up off the floor. The daughter lacks the physical strength to lift her Mom, so she calls 911 to ask paramedics to assist.

The paramedics arrive. They help Mom off the floor and into a recliner chair in the living room. They suggest transporting Mom to the emergency room to make sure she does not have broken bones or an unidentified health condition that might have resulted in the fall.

Because the daughter is on a quick break from work and Mom has fallen before, the daughter declines the transport and signs the paramedic form confirming refusal to transfer.

Co-agent Powers

The next morning, her brother, who is the co-durable power of attorney for healthcare, calls Dad. Dad reports he is still in bed at 10:00 a.m., confirming he is exhausted and sore from the fall he had the previous day.

The son, concerned about his father’s condition, calls 911 to request transport to the hospital. The son meets Dad at the hospital and stays with her.

Doctors confirm that Dad has a hip fracture, a urinary tract infection, and pneumonia. Dad is admitted to the hospital.

The son, who hasn’t yet spoken to his sister, is concerned that she refused to send Dad to the hospital for evaluation the prior day. He is also upset that he found out about the fall by calling Dad instead of being notified by his sister.

Concerns about power-of-attorney abuse or neglect by siblings can strain family relationships. While investigating concerns to determine their validity is necessary, this process can improve or worsen trust in families.

This is an example of co-power-of-attorney agents acting individually on behalf of a parent, as directed by the document executed by their mother.

The Uniform Power of Attorney Act

Not all power of attorney documents use standard language, grant equal powers, or are tailored to the principal’s needs. It is the principal’s responsibility to be knowledgeable and request changes to standard documents to protect themselves and their agents.

The majority of U.S. states have adopted or adapted the Uniform Power of Attorney Act 2006. Exceptions include: Oregon, Arizona, Alaska, Minnesota, Missouri, Illinois, Louisiana, Florida, New York, New Jersey, and Rhode Island.

Some states, like Colorado, offer online consumer access to information on power of attorney statutes, fiduciary responsibilities and duties, including a standard statutory power of attorney form.

Access to this information is important so that principals and agents can gain a thorough understanding of legal and ethical obligations related to durable power of attorney. Depending on where one lives, an Internet search for the Uniform Power of Attorney Act and a state name may return state statutes or acts for review.

Let’s look at how durable power of attorney for healthcare actions and decisions can positively or negatively impact the care of an elderly parent and affect their power of attorney agents.

Is Appointing Co-Agents a Good Idea?

Parents who are completing power of attorney documents may appoint an adult child or a professional fiduciary as an agent.

The consideration of who to appoint must include an honest evaluation of an individual’s character, ethics, education, background, and skills, as well as an honest assessment of the seriousness of the ethical and legal responsibilities they assume.

If one or more adult children are considered, the proven ability to get along with other children and family members to resolve differences of opinion is a critical and necessary skill.

Additionally, attention to detail and any background in managing health, health care, or finances is helpful.

Without these skills, the care, health, and well-being of an elderly parent can be permanently damaged. Unresolved high-conflict situations can destroy family relationships.

It is important that documents contain detailed information to minimize reliance on verbal statements or verbal agreements when others in the family might disagree.

It’s a good idea to create an addendum or a separate agreement for topics in a power of attorney that require more detail.

For example, a caregiver or care management agreement, if payments are to be made in exchange for these services, or a document outlining property that might be co-owned and the disposition after death.

The Risks of Appointing Children Who Don’t Get Along as Co-Agents

For parents who wish to appoint an adult child who does not get along with others, there are several options. For example:

• Instead of appointing co-agents, choose one child as the primary agent and another as the successor agent.
• Revise the statutory power of attorney document to state that children, as agents, cannot exercise independent authority. If this is the plan, then name an individual who agrees to serve as the tie-breaker if your children can’t or won’t agree.
• Appoint a professional fiduciary.

Appointing co-agents for power of attorney is a complicated issue. It is important to discuss the details and risks with attorneys drafting a power of attorney document so that provisions can be in place for situations that go bad.

Attorneys drafting documents who lack litigation skills or experience with the impact of poorly drafted power-of-attorney documents may lack first-hand knowledge of potential issues that can lead to lawsuits. These attorneys may not be able to discuss the risks with their clients.

According to Wilson, some attorneys download a Uniform Power of Attorney Document or use estate-planning templates.

• As a result, principals and agents suffer unintended future consequences of poorly drafted documents.
• Agents may prioritize their interests, isolate parents from siblings, create toxic family relationships, or mismanage healthcare or financial matters.
• Safeguards should always be included in documents to support transparency, hold agents accountable, and resolve potential conflicts, including elder abuse, neglect, or financial exploitation.

Healthcare Decision Making for Agents

Continuing the co-agent discussion, let’s assume two adult children can make decisions without asking each other.

For example, Colorado statute 15-14-711 (1) states, “A principal may designate two or more persons to act as coagents. Unless the power of attorney otherwise provides, each coagent may exercise its authority independently.”

The ability to act independently can be positive, supporting time-sensitive needs and decision-making when an adult child making decisions follows an elderly parent’s direction.

Co-agents who trust each other, communicate, and are transparent can be the ideal agents to support the care and financial matters of an elderly parent.

Co-agents who work against each other can be toxic. One child may make poor decisions that repeatedly harm an elderly parent or illustrate a pattern of neglect. Durable power of attorney for healthcare decisions has a significant impact on a parent’s daily quality of life.

The prior example of a daughter refusing to allow 911 to transport her father to the emergency room for evaluation after a fall can be an example of poor decision-making. If this event repeats and a daughter continually refuses care for her father, contrary to the father’s previously stated wishes to receive care, the daughter can be questioned about intentional harm or neglect.

When Adult Children Should Decline Durable Power of Attorney for Healthcare

If you are an adult child asked to serve as a durable power of attorney, do you have the skills to navigate potential family conflict? Is your life situation such that you can commit the time and effort involved to act in this role?

• How have you resolved family conflicts with siblings or your parents in the past?
• How do you run family meetings to support transparency?
• What steps will you take to protect a parent from a sibling who causes potential harm?

Being a power of attorney is a high-stakes responsibility when you make consequential decisions on behalf of a parent.

If you lack the skills or time to fulfill the duties of a power of attorney agent or lack the skills to positively resolve intrafamily conflict, it may be best to decline the role. Be honest and let a parent know that you lack the skills. Then agree to support the person who accepts this role.

Co-Agent Breach of Fiduciary Duty

Let’s take fiduciary duty to the next level. Colorado statute 15-14-711 (4) states:

“An agent that has actual knowledge of a breach or imminent breach of fiduciary duty by another agent shall notify the principal and, if the principal is incapacitated, take any action reasonably appropriate in the circumstances to safeguard the principal’s best interest. An agent that fails to notify the principal or take action as required by this subsection (4) is liable for the reasonably foreseeable damages that could have been avoided if the agent had notified the principal or taken such action.”  

This means an agent can take another agent to court for cause and have them removed upon proof of a breach of duty and harm. As one might imagine, these sibling power-of-attorney battles can get nasty.

Battles played out in a courtroom can be extremely costly to a parent’s estate and can deplete funds intended to pay for a parent’s care. Avoiding costly legal battles is another responsibility of a durable power of attorney for healthcare decisions, although sometimes legal action cannot be avoided.

The Responsibility of the Principal

The responsibility of the principal or an elderly parent executing power of attorney documents is to recognize potential issues and put safeguards in place.

The potential for intrafamily battles is one reason parents do not appoint their children as power-of-attorney agents. Instead, a professional fiduciary or another individual may be appointed.

Wilson accepted durable power of attorney appointments for older adults and other family members who did not feel comfortable with, or chose not to, burden family members with this legal responsibility.

Power of attorney agent responsibilities can become more complex when a parent has dementia and can no longer advocate for themselves, or when multiple health conditions exist.

The Negative Effects of Power of Attorney When Adult Children Don’t Get Along

Sometimes a parent’s relationship with their children is the reason that their children do not get along. For example, one child left home early, became independent, and has a successful career. The other, who never launched, is dependent on parents for money and a place to live.

Appointing these children as separate agents is unlikely to work, as they have different life experiences and values. Additionally, parents with dependent children must learn to set ceilings and timeline endings for their support or be forever supporting.

Similar situations occur in second marriages when one spouse names the other as a power of attorney, hoping they will do the right thing for their care. These wishes may not always be carried out if there is intrafamily conflict.

The second marriage spouse becomes more interested in money, stops children from visiting, and ends all communication. These examples have played out with celebrities like Peter Falk, Glenn Campbell, and others.

Heart-wrenching situations do not have to happen if legal documents are created with appropriate safeguards.

Durable Power of Attorney for Healthcare and Dementia

Diagnoses of memory loss arising from a diagnosis of dementia, Alzheimer’s Disease, Parkinson’s Disease, aphasia, or a brain injury add complexity for a durable power of attorney for healthcare.

For example, a sibling purposely withholds medical information about a parent having dementia because they are in denial about the impact of Mom or Dad’s memory loss.

Others in the family may not be told about the diagnosis. The diagnosis may not be discussed with the parent, who may realize something is going on with their health, but be uncertain of the cause.

Concerns about elderly parents with dementia who drive a car can be ignored until a significant event. Children may feel guilty about taking away the car keys. Yet sometimes removing a vehicle and providing alternative transportation is necessary. 

So one day, Dad gets behind the wheel of the car and hits three people in a crosswalk. One dies. Two others and the father are hospitalized due to serious injuries.

The hospital medical record confirms a dementia evaluation 6 months ago with a recommendation to stop driving due to safety concerns.

Risks of Driving With Dementia

The result of the accident?

The father is liable for driving a vehicle while knowingly impaired and for wrongful death. A diagnosis of dementia that progresses can negatively impact reaction time, spatial skills, and judgment.

The son, as the durable power of attorney for healthcare, is liable for negligent entrustment for allowing a parent with a known health impairment to continue driving.

While ending driving privileges may seem like a restrictive measure, when proof exists that driving poses a safety concern, failing to take reasonable action to end driving and provide other transportation options is risky and negligent.

Similarly, there may be a time when an elderly parent with memory loss is unsafe living alone at home and must be moved. Safety concerns can include:

• Falls with a parent lying on the floor undiscovered for hours because the parent did not recall how to call 911.
• A parent wandering out of the home and being picked up by the police miles away from home.
• Self-neglect is identified because a parent forgets to eat, take medications, bathe, change clothing, or use the toilet.

Breach of Fiduciary Self-Dealing and Conflict of Interest

Let’s examine everyday situations that can place a power of attorney in a compromising position, leading to a breach of fiduciary duty and a conflict of interest.

• A parent or parents move into an adult child’s home. The parent pays for home upgrades or remodels. Money is comingled.
• A child and a parent purchase a home together with the intention that the child will care for the parent.
• A child moves into a parent’s home to act as a power of attorney, care manager, and caregiver with an agreement that the child will be paid for these activities.

While these may seem like normal decisions that family members make, when considered from a legal perspective of duties, ethical responsibilities, and loyalties, they can create complications in durable power of attorney for healthcare decision-making.

Reimbursement and Compensation of Agent

A comparison of Colorado and Iowa laws sheds light on the differences in using a statutory power of attorney document without adding safeguards or additional provisions. Let’s look at:

• Colorado 15-14-712 Reimbursement and compensation of agent
• Iowa Iowa 633 B.112 Reimbursement and compensation of agent

While both laws address the same topic, the rules are opposite.

Colorado 15-4-712 states, “Unless the power of attorney otherwise provides, an agent is entitled to reimbursement of expenses reasonably incurred on behalf of the principal and to compensation that is reasonable under the circumstances.”

Iowa 633B.112 states, “Unless the power of attorney otherwise provides, an agent who is an individual is entitled to reimbursement of expenses reasonably incurred on behalf of the principal but not to compensation. IF a power of attorney does provide for compensation or if the agent is a bank or trust company authorized to administer trusts in Iowa, the compensation must be reasonable under the circumstances.”

Additional Provisions to Power of Attorney Documents

Colorado allows reasonable compensation for a power of attorney agent. Iowa does not.

So if you are in Iowa and your parent verbally states he or she wants to pay you for power of attorney responsibilities or caregiving or care management activities, rather than relying on a verbal contract that contradicts state law, the power of attorney document should be updated, and a compensation agreement created.

A legal compensation agreement can include duties related to power of attorney, care management, and caregiving. Additionally, the status as an employee or independent contractor, the method of compensation, tax payments, and other benefits should be described in detail.

These simple changes can eliminate the appearance of self-dealing or a conflict of interest, which family members or others may allege as fiduciary breaches. Additionally, full transparency within the family, including siblings, upon execution of the agreement, will allow family discussions and the addition of safeguards if siblings object to the wishes of a fully competent parent.

Legal Risks of Changing Documents When a Diagnosis of Dementia Exists

Of note, changes or updates to power of attorney documents should confirm that the parent making the changes is doing so of their own free will. Having a capacity evaluation by a physician or a neuropsychologist can be a good idea if there is any question about a parent having a memory loss diagnosis.

If a capacity evaluation is not recorded for a parent with memory loss, family members may contest the validity of changes to the documents as having been made under undue influence by the power of attorney agent or person who benefits he most.

Final Thoughts: Durable Power of Attorney Documents

For everyone completing power of attorney documents, be wary that vague information in standardized forms can lead to intrafamily conflict or unintentionally harm the principal creating the document.

Know the personalities in your family and make provisions for worst-case scenarios, hoping they will never happen.

Do not place yourself in questionable situations that might arise in the future. Take steps today to know what can and might happen.

Protect yourself by thoroughly researching state laws, reading and understanding power of attorney statutes, and consulting an attorney to create well-drafted documents specific to your situation.

Looking For Professional Advice and Caregiving Strategies? Schedule a  1:1 Consultation with Pamela D Wilson.

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