What Is a Power of Attorney?

It’s not something anyone wants to think about, but there may come a point in life when someone else will need to make decisions for us. No one can predict a sudden health crisis, or recognize the exact moment when we can no longer make decisions for ourselves. But anyone can plan for those scenarios. 

A power of attorney can provide seniors and their families with great peace of mind. These legal documents allow someone else to make financial, legal and healthcare decisions for an older adult when the senior is no longer able to do so for themselves.

What is a power of attorney?

Many people may not understand the importance of a power of attorney, thinking they can simply step in as needed to make decisions for a family member. But that’s not the case.

Without a valid power of attorney, seniors have no one who’s legally empowered to act on their behalf. A power of attorney is recognized to be the designated decision-maker. It provides a process that allows a trusted person to make the decisions, rather than someone a probate court appoints to handle financial matters or a medical staff that doesn’t know their patient’s wishes.

This is also why there are two main types of powers of attorney older adults may choose to create: a medical power of attorney and a financial power of attorney. One thing to note is that you don’t have to choose the same person to be your medical and financial powers of attorney. If you choose two separate people, they’ll likely work together to decide things on your behalf, like whether you can afford the medical care chosen for you.

1. A medical power of attorney. If a senior’s physical or mental health worsens, a medical power of attorney designates the person who can make decisions to get them the help they need. 

Without a medical power of attorney, a family member will be asked to make any important decisions for their elderly parent or other loved one, which can cause issues if family members disagree on the course of medical action. If the senior doesn't have any family members who can make those decisions, then the senior’s medical decisions will be made by the attending staff, who act based on what they think is best for their patient. However, those decisions may not reflect what the senior wants at all.

Seniors who’ve recently been diagnosed with Alzheimer’s disease or other form of dementia can still create a medical power of attorney if they have legal capacity — the ability to understand and appreciate the consequences of their actions. The senior selects someone who can make decisions about which doctors to choose, what types of treatments to choose, and what care facilities to use when the senior with dementia can no longer make those decisions. The medical power of attorney can also include the power to make end-of-life decisions for seniors in the late stages of the disease.

2. A financial power of attorney. If an older adult can no longer manage their own finances, this document allows the person they’ve chosen to make financial decisions for them. This type of power of attorney extends no further than the right for someone else to make money decisions if and when an older adult is unavailable to do so themselves.

The person named in the financial power of attorney is called the agent or attorney-in-fact, though that person doesn’t actually have to be an attorney. They should be someone who has common sense and is trustworthy enough to decide what should happen to your money.

The agent is the one to handle such tasks as paying your mortgage and other bills, deposit your Social Security checks, file tax returns, and watch over your retirement accounts or other investments. They don’t need to be a good financial expert, because if necessary they can hire professionals to assist with the more complicated tasks.

If you elect not to have a financial power of attorney, no one — not even your spouse — has default authority to handle financial matters on your behalf. 

Understanding what happens without a power of attorney 

Every state has its own laws around the power of attorney process, but if someone doesn’t have one and needs medical or financial intervention, usually the same thing ends up happening: A court gets involved.

If an older adult has no power of attorney and something happens to them, a family member may need to go to court to get the authority to handle their financial matters and make their medical decisions. And that takes time and money. Again, if there’s a sudden health crisis, there may be no time to do this — in which case, a stranger could be making those decisions for the older adult.

Everyone wants to keep control over their own lives, and a power of attorney helps ensure that a person’s wishes are respected and followed. Smart, thoughtful planning can make a significant difference when it comes to preparing for whatever the future may bring.

Another smart way to plan for the future is to become a resident at an Aspenwood Company community. It allows you to comfortably age in place knowing higher levels of care are available to you should you ever need them. Find a community near you, or contact us.