A power of attorney grants an agent the ability to act in the principal’s name, within the limitations set by the power of attorney document itself. A power of attorney can be sweeping and vague, or it can be incredibly targeted.
For example, you could create a power of attorney to give someone the ability to represent your interests for all financial purposes, or you could restrict it to a single transaction, such as giving a close friend or relative the ability to sign a lease for a home in another state in your name.
Powers of attorney are typically created whenever there is a reason to extend the ability to make legally binding decisions in your name to other people. The most common reason to consider creating a power of attorney is to ensure that, in your physical or mental incapacity, important decisions are made by someone you trust.
It is a common practice to create at least two powers of attorney to separate your financial agent from your healthcare agent. When naming either, it’s crucial to understand their role – and discuss it with them in detail.
What is a Healthcare Power of Attorney?
A healthcare power of attorney, often also known as a durable medical power of attorney, is a document created by the principal (you) to appoint an agent to make healthcare decisions on their behalf if they are unable to make these decisions themselves.
The important distinction between a durable power of attorney and other types is that it is only applicable when the principal is unable to make decisions for themselves, due to incapacity or mental incompetence.
An optional and powerful element of a healthcare power of attorney is the HIPAA release, permitting an agent to talk to all the principal’s current and past physicians to make an informed decision about their healthcare.
There are certain limits to a healthcare power of attorney. Healthcare powers of attorney are durable, which means that they only kick in once the principal is unable to communicate with their physicians and healthcare providers themselves. If a principal is left in a coma, becomes infirm, or is mentally incapacitated, a healthcare power of attorney would spring into effect, making the designated agent the person responsible for every decision in the principal’s continued care.
However, a healthcare power of attorney typically does not extend past that limit. They cannot manage the principal’s business, access or manage their estate, or act in the principal’s name in any way unrelated to their healthcare unless stated otherwise in the power of attorney document. A power of attorney can be written to grant a person as much or as little power as necessary to ensure that a principal’s voice is heard, loud and clear.
Nearly anyone can be a healthcare agent, provided they are at least 18 years old and are not in any way affiliated with the principal’s healthcare (such as being their physician) to prevent any conflict of interest. It’s important to choose someone you trust as a person and as a decision maker. Depending on what happens, your life may be in their hands someday.
To that extent, only a principal can usually grant or revoke an agent’s powers. If a principal is incapacitated, the only way to have a power of attorney revoked is to get a judge to make the call based on the agent’s behavior. Alternatively, the agent themselves can decide not to take on the responsibility of being the principal’s representative.
A healthcare power of attorney is a common element of a comprehensive and larger estate plan. An estate plan is not exclusively about what gets done when you die – it can also encompass important questions about financial and healthcare decision making while you are still alive, yet unable to function.
In much the same way a trust can kick in while a person is still living, while a will cannot, a power of attorney exclusively functions while the principal is alive. Furthermore, the agent loses their power of attorney after the principal dies.
Healthcare Power of Attorney vs. a Living Will
A healthcare power of attorney is not to be confused with a living will, also known as an advance directive or a physician directive. Living wills have nothing to do with your last will and testament but are instead documents detailing what procedures and medical requests you may have in mind for your continued healthcare, in the case of incapacity.
Whereas a healthcare power of attorney names someone to make healthcare decisions in your name, an advance directive or living will allow you to make certain foreseeable decisions now. These are especially important for adults with recurring or chronic health issues, or progressive illnesses.
You can go the extra mile and prepare both, ensuring that if a decision must be made and you haven’t prepared an answer for it via your directive, your healthcare agent can step in to make your wishes clear.
Understanding the Responsibilities of a Healthcare Agent
The primary responsibility of a healthcare agent is to make decisions that are consistent with the principal’s interests, wishes, and thoughts. Your healthcare agent must be someone you trust to make the same choices you would – or at least someone you trust to make the right call. To that end, however, it isn’t just enough to choose someone you agree with or trust deeply.
Communication is vital. They need to thoroughly understand what is expected from them, and they need to thoroughly understand you. They need to know what you would have wanted if they’re called upon to decide, and you need to know they’re able to make the best decision for you. It isn’t so much about whether or not you two might think alike – it’s about ensuring they know what you would want.
You Don’t Have to Accept the Responsibility
At the end of the day, every healthcare agent also reserves the right to refuse their privilege. No one is forced to make important, life-changing decisions for someone incapacitated. To that end, it’s also important to approach the topic tactfully and to avoid overwhelming your potential agent with the responsibility that comes with a power of attorney.
Make sure you’re both prepared for what might come. Talk with an estate planning professional about powers of attorney today.