Power of Attorney

By Pamela D Wilson, MS, BS/BA, NCG, CSA

Power of Attorney Responsibility

Appointment of power of attorney establishes a fiduciary relationship between the grantor and the attorney-in-fact. This means that the relationship is based on confidence and trust. The responsibility of the power of attorney is to act in the best interest of an aging parent, spouse, family member, or friend to oversee health care and to protect and preserve property, and money.

Appointing a power of attorney involved planning for a future oriented relationship. Adults initiating estate plans will appoint a medical power of attorney and a financial power of attorney to provide support when advancing health issues, illness, or frailty occurs. Power of Attorney

Those who have not planned may execute the documents while in the hospital at the time of need. Executing power of attorney documents in the midst of a crises is not the ideal situation

It is important when appointing a power of attorney to discuss the responsibility with the person being appointed. Medical and caregiving knowledge is beneficial for the person appointed medical power of attorney. Financial power of attorney, depending on the value of property and assets,  benefits from appointing a person who is experienced working with investment brokers and managing property. 

I been involved in situations where parents appointed an adult child, with no experience or ability to manage money, only to find their bank accounts drained. Better to appoint a professional with the expertise to manage money than turn over the security of hard-earned money to someone with poor financial management skills. The decision about who to appoint as financial power of attorney should be given thoughtful consideration. Estate planning attorneys are able to provide recommendations for professionals who act in these roles when the decision is not to appoint family. 

Individuals appointed as medical power of attorney must also take this appointment very seriously. Life and death decisions will be made. Discussions about end of life wishes, and advance planning for burial or cremation are best discussed in advance. Constant availability is required when health advances to a point where oversight and care coordination becomes a daily activity. While support can always be hired, the medical power of attorney is the one making difficult care decisions and signing medical forms for treatment.

Having extensive knowledge of prior medical care, medications, physicians, hospitalizations, care preferences, and other information is extremely important for a medical power of attorney to serve effectively.  At the time of assignment this information should be collected and retained in a file in the event of an unexpected emergency. The ability to coordinate care and speak to doctors, nurses, and other medical professionals is also important. Do not appoint a timid medical power of attorney. Strong advocacy is needed to collaborate with a medical system that can be uncaring and insensitive to the needs of older adults, especially those diagnosed with dementia.

Who Can Serve as Power of Attorney

Anyone over the age of 18 can serve as medical and financial power of attorney.  Family members have traditionally been the first choice to serve as power of attorney; however, this trend is rapidly changing. Professional fiduciaries are more commonly being appointed for a number practical of reasons.

A plan to establish a fiduciary relationship with a professional to serve as power of attorney is relevant when children live at a distance or reside locally but have not proven to be responsible. In many situations, parents do not wish to burden children with power of attorney responsibility. There are also situations where parents do not trust adult children to serve in these roles. 

Appointing a professional power of attorney eliminates the potential of hurt feelings of one child being appointed over another to serve in a fiduciary capacity. We know that family jealousies exist and that children do not always get along. A professional appointment eliminates the possibility that a child assigned power of attorney may act in ways that do not support the parent’s best interest to protect health, property, or money.

Statistics indicate that the majority of elder abuse presenting in financial abuse is by family perpetrators who are children of the elderly parent.  In many situations, adult children with control of parental finances are tempted to use the funds for their own use to pay monthly bills or take out loans that are rarely, if ever, repaid. There is a hesitation to use funds to pay for care of an aging parent as this would reduce the amount of an inheritance. 

Parents with cognitive impairment, like Alzheimer’s disease, are vulnerable to those who might wish to take advantage of finances. Adult children may be more interested in the parent’s money than in committing to the best care possible for the parent with the associated expense. Money for an inheritance is a significant temptation for adult children who may feel entitled or who still in middle age relay on parents for financial support.

Power of Attorney Financial Abuse and Medicaid Complications

Misuse of money by a power of attorney who is an adult child will complicate care for the parent at the time a Medicaid application is submitted. Medicaid applications require a very clear explanation and documentation of how money was spent.

Applications may be declined by Medicaid due to the actions of the child who spent funds not for the care of a parent. The purchase of vacations, multiple vehicles when the parent no longer drives, renovations to the home of the child where the parent does not live and similar expenses may be questioned for benefit. Funds must be repaid by the child before approval of the application. This is usually unlikely when the child has poorly managed their own finances and the finances of the parent. An appeal may be made but is not always guaranteed to succeed. 

In circumstances of financial abuse by adult children, most parents refuse to press criminal charges against their own children who clearly did not manage health, property, or money in a fiduciary capacity. The legal system finds it challenging to press charges against family members who have been assigned power of attorney by a family member. They refuse to take these cases due to the difficulty of winning in court. 

Power of Attorney for Second Marriages and Other Family Situations

Individuals who have never married or are widowed may not wish to rely on brothers, sisters, or friends to act as a power of attorney.  Individuals involved in second marriages frequently use professionals. 

Appointing a spouse from a second marriage to be power of attorney may be uncomfortable due to negative feelings by adult children from the first marriage. Family disagreements and battles are unpleasant situations when disagreement exists over children or step children appointed as power of attorney. Legal battles that extend to court hearings occur. 

The decision of who to appoint as power of attorney is a personal decision. Some parents feel guilty when choosing a professional fiduciary; however, realize that due to family circumstances this appointment the best choice.  Single individuals who are proactive, appoint professionals so that the power of attorney documents are in place prior to the time of need.

It is important to appoint primary and secondary powers of attorney with the provision that if one is unable or chooses not to act a successor may be appointed without having to execute new documents. Placing the standard statement in estate planning documents about the power of attorney being appointed the guardian or conservator is important to avoid expensive legal fees and court proceedings in the future.

If it is known that family members will cause potential issues surrounding medical care or financial matters, information about this concern can be written in the document excluding involvement. Discuss these concerns with an estate planning, probate, or elder law attorney familiar with estate or probate litigation.

Clarity in direction about concerns may eliminate potential disagreement by family members about what a loved one would have wanted for medical care or financial expenditures. Wills may also be written and the signing recorded on video to avoid future contested hearings. While we all hope family members will get along at the time of need this is not often the situation. I have been involved in many contested court hearings about wills where family objected to charities receiving money. .

Selecting a Professional Power of Attorney

Fiduciaries have professional designations to support their expertise in this area.  Professional designations for fiduciaries may include membership in the National Guardian Association as a certified guardian, accredited investment fiduciary, or registered fiduciary.  These designations require continuing education and participation in best practices to ensure participation that meets guidelines and standards to support conduct of a fiduciary relationship.

Years of experience, college education, and affiliation with healthcare and financial associations are a consideration in appointing a medical or financial power of attorney. Many estate planning, elder law, and probate attorneys work with professionals who they can refer for an interview. Make certain that you meet the professional power of attorney candidates in person to ensure a good personality match.

Many states have specific guidelines for oversight of power of attorney, guardians, and conservators. This oversight includes review of compensation and specific requirements for documentation regarding use of funds and medical care. All expenses are documented as well as all communication involved in the support of medical care and this information is shared with clients or other individuals who may be designated to provide oversight.

At the time documents are executed for power of attorney by a probate, elder law, or estate planning attorney copies should be provided to the power of attorney.  This ensures that if an emergency were to happen, the power of attorney has documents to take to the hospital emergency room. In the event finances require management, the power of attorney would also have access to bank accounts.

All individuals over the age of 21 should have medical power of attorney and financial power of attorney documents as well as a living will.  One never knows when an unexpected event might occur, requiring the assistance of a family member or professional fiduciary assigned with the responsibility to make healthcare decisions, oversee well-being, financial matters, and property.

If you are thinking, “i’m too young,” or “I’ll take care of this later,” watch this 17-minute video called “Eat Your Cookies” that may convince you that now is the time to prepare your power of attorney documents.

© 2018 Pamela D. Wilson, All Rights Reserved.

Pamela D. Wilson, MS, BS/BA, CG, CSA, is a national caregiving thought leader, caregiving expert, advocate, and speaker offering online support and programs for caregivers seeking support and advice for the care of aging parents, spouses, and other family members. Pamela supports adults, age 50+, with positive aging advice and online programs to advance health literacy and self-advocacy. Collaboration with professionals in the specialty areas of estate planning, elder law, and probate, financial planning, and healthcare raises awareness of and sensitivity to stressful family caregiving and healthcare issues.

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