A Guide to Power of Attorney for Elderly Parents
Reviewed by: Lisa J. Gary, Esq.
A power of attorney (POA) can be an important element of planning for your elderly parent’s future. It allows another person to take action on your parent’s behalf, ensuring bills get paid and medical decisions can be made in the unfortunate circumstance that your elderly parent is unable to do those things on their own or merely needs help with such tasks.
With a power of attorney in place, you can be confident that you’re prepared and your parent’s wishes will be respected when they need help. In this guide, we’ll explain the types of power of attorney, when a POA for an elderly parent makes sense, and go through the steps of choosing and setting up a power of attorney so that you feel prepared to complete this process for your loved one.
Power of Attorney: The Basics
At its most basic, a power of attorney is a document that allows someone to act on another person’s behalf. The person allowing someone to manage their affairs is known as the principal, while the person acting on their behalf is the agent. It’s important to note that POAs are generally governed by state law and there may be some differences between states. Generally, these differences are minor, but when arranging a POA, it’s important to talk to an attorney who understands the law in your state.
You also need to understand what a POA cannot do. A POA only allows someone to do the things that are agreed upon within the document. If your parent signs a POA allowing someone to act on their behalf, they can still act on their own behalf so long as they retain the capacity to do so. An agent doesn’t have the exclusive right to act and make decisions for the principal.
Additionally, agents must act as fiduciaries. This means that if you’re the power of attorney for your parent, you must manage their affairs to their benefit, not your own. The Consumer Financial Protection Bureau has advice about the legal responsibilities that agents agree to when signing a POA. You should remember that your authority as an agent is limited to what the document and the state allow.
Different types of POAs can also give the agent different powers, so it’s important to research the type of POA you need. The different types are:
General Power of Attorney
This type of POA gives the agent broad rights to manage the affairs of the principal. It lasts for a specified time, which can be noted in the document. It can also be revoked by the principal at any time and will automatically end when the principal is determined to be incapacitated. This type of POA is often used when someone can still take care of their affairs but would rather someone else do so. As these POAs end at incapacitation, they’re not a great choice for end-of-life planning or medical directives.
Durable Power of Attorney
A durable power of attorney lasts after the principal’s incapacitation. What you can do with a durable POA is based on both the document and state laws. In some cases, you may only be able to manage the principal’s finances and will need a separate medical power of attorney to make health care decisions. These POAs are used when a person can no longer handle their affairs, and it can end in several ways. They can be revoked upon the principal’s death or when a guardian is appointed. The principal can revoke the POA if they’re no longer incapacitated. For example, if a person wakes from a coma, they can take back control of their finances. There may also be conditions in the document that, if fulfilled, end the POA. A durable power of attorney comes into effect on the day it’s signed unless otherwise specified.
Medical Power of Attorney
A medical power of attorney gives an agent the right to make decisions about the principal’s health care. It’s a type of durable POA that lasts until it’s revoked or the principal is determined to be competent again. It may also have an expiration date listed in the document. This type of POA is needed for people who can’t make decisions about their medical care and is common for later-life planning and making legal preparations for people with disabilities.
A medical POA is different from a living will, which states what medical procedures a principal does and does not want done. In the case of a medical POA, the agent can make all health care decisions for the principal. Because of this, your parent needs to make their wishes known to the agent before they’re incapacitated. The American Bar Association has detailed information available about medical powers of attorney and the process of giving someone that power.
Limited Power of Attorney
A limited power of attorney limits the agent to make decisions about specific tasks. It is often used to authorize someone to pay bills or sell a house, and the agent can only take action that’s specified in the document. These POAs are generally only active temporarily and will be revoked if the principal becomes incapacitated.
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