What is a power of attorney for property?
A power of attorney (POA) for property is a legal document in which you authorize another person (or persons) to act on your behalf regarding your assets and legal matters. This person is called your attorney-in-fact or your agent, and the powers granted him or her depend on the provisions you make in your POA. This document is often referred to as a Financial Power of Attorney.
You may draft an extremely specific power of attorney, granting your agent limited authority. For example, if you purchase a home in another state, you may create a POA granting your agent the authority to only sign a deed on that property on your behalf. On the other hand, you may choose a general power of attorney, granting your agent the authority to do just about anything, from running your business to signing checks to selling property.
What is a durable power of attorney?
A standard POA only remains active until your death, its provisions are fulfilled, or you become incapacitated. This means that for example, if you are deemed mentally incompetent or a doctor states you can no longer give informed consent, your power of attorney is no longer valid.
A durable power of attorney remains in effect even after you become incapacitated. This allows your chosen agent to continue to act on your behalf, per the provisions of your POA, even if you have Alzheimer’s. In the absence of a durable power of attorney, if you become incapacitated, someone must petition a court to name a guardian and/or conservator to handle your finances and make decisions for you.
Who can have a power of attorney?
Anyone who is the age of majority and of sound mind can create and have a power of attorney. In most states, the age of majority is 18.
Who is the Principal in a power of attorney?
The Principal is the person signing the POA and granting authorization for someone to act on his or her behalf.
Who is the Attorney-in-Fact in a power of attorney?
The attorney in fact is the person you choose to act as your representative in a POA. This person is commonly referred to as your Agent. This person does not need to be an attorney; he or she is simply the person you choose to represent your interests. This person must be someone who has reached the age of majority in your state.
Why do I need a power of attorney?
There are many reasons you might need a power of attorney. A POA can protect you if you travel frequently. If your need to sign documents while you are travelling (such as loan closing documents), it may be difficult to get the documents to you, or find witnesses or find a notary. If you have given an agent the ability to sign for you, it does not matter what part of the world you are in. A POA is also helpful if your wallet is stolen as your agent can call to cancel your cards and make reports to the credit agencies on your behalf.
If you have any type of physical limitations (whether short term or long term) or have difficulty signing documents, your agent can act or sign documents for you.
A durable POA, especially, protects you and your assets in the event you become incapacitated and are no longer able to manage your affairs. This includes tasks such as selling assets, applying for Medicaid and paying bills.
If you were to have an accident or become ill without a POA, your family must petition the probate court to assign a guardian and/or conservator. The court uses a standard hierarchy, with no guarantee that the person the court assigns follows your personal wishes. Depending on the jurisdiction, a court assigns an agent in this order:
- Spouse (unless legally separated)
- Adult child
- Parents
- Siblings
When does a power of attorney go into effect?
The POA is effective once it is signed, and witnessed or notarized properly based on your jurisdiction, unless the document states otherwise. Some documents provide for the POA to be effective at some point in the future, such as if you are determined to be incapacitated or on a certain date. This is called a springing POA.
Who should I choose to be my Agent?
When choosing your agent, take great care to choose someone you trust to act responsibly and in your best interests. This may or may not include your spouse or adult children. Just because someone is related to you does not mean they would be your best choice.
Look for someone who is organized and detail-oriented. You want someone who handles their own finances well such as paying their bills on time. You may want to consider whether he or she has filed bankruptcy in the past or has acted dishonestly in the past. You want someone who is willing to follow your wishes and keep you updated as to your finances.
If you do not have anyone in your family that meets these criteria, you may look to a professional for help. Your attorney can help you select the right person or entity to act as your agent.
What sorts of actions may I authorize my agent to do?
You have many options in your POA. In most cases, any type of action you can do, your agent can take the same action as well. Some actions include:
- Applying for benefits on your behalf, such as Social Security and Medicare
- Buying and selling property
- Cashing checks
- Collecting debts owed to you
- Filing lawsuits on your behalf
- Making investments
- Taking out loans
- Signing documents
- Managing and/or running your business
- Collecting your mail
- Providing for your pets
In your power of attorney, you specify which actions you authorize your agent to perform, and when those authorizations take effect. Some actions, however, must be specifically stated in your POA to be valid. These include:
- Creating a trust on your behalf
- Changing community property agreements
- Designating beneficiaries on insurance policies
- Making gifts of your property (including money)
Your agent may not be granted the power to make or change your will, nor vote in elections on your behalf.
Is there any risk to creating a power of attorney?
Yes, there is, especially if you choose poorly when selecting your agent. The person you choose has legal access to any property authorized in the POA, as well as the ability to make legal decisions on your behalf. If this person makes foolish decisions or takes off with your money, you have little legal recourse.
What’s more, you are responsible for your agent’s actions when he or she acts on your behalf. This includes paying for property if your agent signs a sales contract (assuming he or she was given authority over your financial affairs), regardless if you wanted that property.
Can I revoke a power of attorney?
Yes, so long as you have the mental capacity to do so. If you never gave the agent the POA, you only need to destroy the document (if you also never gave it to any institutions, such as your bank).
If you already recorded the POA, or gave it to the agent or an institution, work with your attorney to create a revocation document, which becomes effective once it is properly signed, witnessed and/or notarized. Afterward, give copies of the revocation to anyone who had the original POA.
If you filed the original POA with a County Recorder, you must also file the revocation with the same county.
Does a power of attorney need to be renewed or updated?
Yes, you should review your POA every few years with your attorney to make sure it still represents your wishes and there are no legal changes needed. You may want to re-execute your POA occasionally (every five years or so), even if you experience no changes. Some financial institutions will not rely on a document if it was not executed recently.
As of this writing, Chase Bank will not honor a POA that was executed more than six months ago, and Wells Fargo will not honor a POA that was executed more than 1 year ago.
When I create a power of attorney, do I lose control over my money?
No, you retain control over all of your property, including finances, even though your POA gives your agent access to control your property. That means that an unscrupulous agent may take advantage of this authority. Choosing the right agent, someone you trust, is vital.
Am I able to continue acting independently after signing a power of attorney?
Yes, your POA does not take precedent over your own decisions. If you and your agent disagree, you have final say. However, if your agent acts on your behalf and then you disagree, the agent’s action stands. If your agent disrespects your wishes, you may revoke the POA at any time so long as you have the mental capacity to do so.
If you have a durable power of attorney and your agent believes you now lack the mental capacity to make sound decisions, he or she may petition the court for guardianship and/or conservatorship. At this point, the court determines your mental capacity, relying on the testimony of expert witnesses such as medical professionals.
Can my agent take or sell my property without my permission?
Yes, if the POA grants permission for that action. Even though your POA is little more than a piece of paper, it is the equivalent of trusting that person with your property. Protect yourself by choosing a trustworthy agent.
What can I do if I think my agent is stealing from me?
Your first step is talking to your attorney and revoking the power of attorney. Next, notify your agent and all your financial institutions that you have revoked the POA.
From there, you and your attorney can file a demand with the court, requiring the agent to file an accounting of your money and property. The court schedules a hearing and, if it finds that the agent stole from you, you may sue and/or press criminal charges.
May I assign more than one agent to be my power of attorney?
Yes, you may assign co-agents, but that does not necessarily mean that you should. Confusion and conflict are not uncommon in these situations. Before assigning more than one agent, discuss the pros and cons with your attorney who can give your advice and counsel that is best for you.
You should assign a secondary agent who takes over for your primary agent in the event your primary agent is deceased, cannot act for any reason, or resigns. It is best practices to name a third agent as well.
Do I have to have an attorney prepare my power of attorney?
No, an attorney does not need to create this document. However, powers of attorney are complicated and involved legal documents, bestowing a great deal of power on an individual. Documents that are “simple” and do not have comprehensive provisions do not protect you, and are often not accepted by financial institutions or relied on by third parties. Consulting with an attorney who practices in this area of law is strongly recommended.
Health Care Powers of Attorney
What is a health care power of attorney?
A health care power of attorney (HCPOA) is a legal document in which you authorize another person (or persons) to act on your behalf regarding your medical decision and treatment in the event of an emergency and if you are incapacitated. The powers or limitations granted him or her depend on the provisions you make in your HCPOA.
What is a mental health care power of attorney?
A few states require a mental health care power of attorney in addition to a general health care power of attorney. This document grants someone the ability to make mental health care decisions for you such as arranging psychiatric and psychological treatment, consent or refuse mental health prescriptions, or admit you to an in-patient treatment facility.
If you do not have this document and you require mental health treatment in a state that requires it (such as Arizona), a family member will likely have to petition a court to become your guardian.
Who can have a health care power of attorney?
Anyone who is the age of majority and of sound mind can create and have a power of attorney. In most states, the age of majority is 18.
Who is the Principal in a health care power of attorney?
The Principal is the person signing the HCPOA and granting authorization for someone to act on his or her behalf.
Who is the Agent in a health care power of attorney?
The Agent is the person you choose to act as your representative in a HCPOA. This person must be someone who has reached the age of majority in your state.
Should I have a health care power of attorney?
If you are 18 years or older (or the age of majority in your jurisdiction), you should have a health care power of attorney. Remember, even when a child still lives at home, if he or she is an adult, parents no longer have the authority to make medical decisions for that child.
In 2015, approximately 17,250 car accidents happened daily in the United States. No one is immune to needing medical care at some time in their life. The best way to protect yourself and your loved ones in a crisis is to give someone the legal ability to help you in an emergency so that your family does not have to petition a court to become your guardian.
When does a health care power of attorney go into effect?
The health care power of attorney is valid once it is signed, and witnessed or notarized properly based on your jurisdiction. However, your agent cannot act for you until one of the following occurs:
- You cannot communicate;
- A doctor stated you can no longer give informed consent; or
- You are incapacitated.
Unless one of the above occur, you maintain complete control of your own medical decisions.
Who should I choose to be my Agent?
Name a person that you trust to act as your agent. This may or may not include your spouse or adult children. Just because someone is related to you does not mean they would be your best choice.
Your agent speaks for you when you are no longer able to speak for yourself. The ideal agent is:
- Someone willing to ask tough questions who is not intimidated by medical professionals.
- Someone who can emotionally withstand a crisis situation.
- Someone capable of setting aside their own feelings about a treatment option or procedure to make sure your wishes are followed.
- Someone who understands your choices about end-of-life care.
- Someone willing and able to communicate with other family members about your condition.
Discuss your medical preferences with your agent to ensure he or she understands your choices and agrees to follow them if it becomes necessary. Do not ignore this discussion. Although difficult, it serves two purposes. One, you learn whether your chosen agent is willing to adhere to your wishes as some people have moral or religious objections to certain medical choices. You need this information before naming an agent whose beliefs forbid him or her from following your wishes. The second reason is that this discussion ensures your agent understands your wishes. A full understanding of your medical wishes helps your agent advocate on your behalf.
You should list at least one other person as a back-up in case your first choice is unable to carry out your wishes. Two back-ups is preferred. After making your choice, be sure to speak with that person about possible scenarios and how you want them dealt with. While you can’t anticipate every eventuality, the more you talk with your agent, the more they will come to understand your wishes.
If you do not have anyone your life that meets these criteria, you may look to a professional for help. Your attorney can help you select the right person or entity to act as your agent.
What sorts of decisions may my agent make?
Unless otherwise specified in your document, any type of medical decision you can make, your agent can make as well. Some decisions include:
- Whether to continue artificial life support
- Consent to or refuse medical evaluations, surgery, treatment or other medical procedures
- Consent to or refuse prescription medications
- Consent to or refuse blood transfusions
- Arrange for long-term care
- Authorize anatomical gifts for transplant or medical research purposes
- Make funeral and disposition arrangements
Can I revoke a health care power of attorney?
Yes, so long as you have the mental capacity to do so. If you never gave the agent the HCPOA, you only need to destroy the document (if you also never gave it to any medical institutions, such as a hospital).
If you already gave it to the agent or a medical provider, work with your attorney to create a revocation document, which becomes effective once it is properly signed, witnessed and/or notarized. Afterward, give copies of the revocation to anyone who had the original HCPOA.
If you provided a copy to a medical document holding company (or some states allow the Secretary of State to hold copies of these documents), you must also file the revocation with the same.
Does a health care power of attorney need to be renewed or updated?
Yes, you should review your POA every few years with your attorney to make sure it still represents your wishes and there are no legal changes needed.
May I assign more than one agent to be my health care power of attorney?
Yes, you may assign co-agents. If you assign two people to act as co-agents, they must act unanimously. If you choose 3 or more, the HCPOA should state whether the agents must act unanimously or if they can act by majority.
Before assigning more than one agent, discuss the pros and cons with your attorney and how co-agents work in practice. Your attorney can give your advice and counsel that is best for you and your family.
Do I have to have an attorney prepare my health care power of attorney?
No, an attorney does not need to create this document. However, powers of attorney are complicated and involved legal documents, bestowing a great deal of power on an individual. Documents that are “simple” and do not have comprehensive provisions do not protect you, and are often not accepted by medical institutions or relied on by third parties. Consulting with an attorney who practices in this area of law is strongly recommended.
Living Wills
What is a living will?
A living is a legal document in which you outline your wishes regarding the kind of life-sustaining treatment you want or don’t want.
In a living will you can outline your choice of whether to have medical interventions such as CPR, artificial hydration, nutrition through feeding tubes, breathing machines, blood transfusions or renal dialysis to keep you alive. It should also contain provisions as to whether you would want pain medication (such as morphine) to be administered to you for comfort care, even though that may shorten your remaining life.
A living will is different from a HCPOA. A living will describes what medical choices you prefer vs. whom you want to make medical decisions for you.
When is a living will used?
A living will is used if:
- you have been diagnosed with a terminal illness (most jurisdictions define this as a doctor states you have less than 6 months to live); or
- you are in an irreversible coma; or
- you are in a persistent vegetative state; AND
- you can no longer make medical decisions for yourself.
An effective living will also states who determines if you are in one of the above conditions, such as your attending physician or two independent physicians.
This is not a document that should surprise your family. It is best to discuss your choices with your doctors, medical POAs and family members so they can understand and honor your wishes if needed.
Is a living will a DNR?
No. A Do Not Resuscitate (DNR) is a separate document from a living will. A living will in only used in certain circumstances, whereas a DNR is used no matter what type of medical incident has occurred.
If someone has validly executed a DNR that is present when a medical crisis occurs, medical personnel will not use equipment, drugs, or devices to restart your heart or breathing. Many states require the DNR be executed on a specific color paper—like orange or yellow—to be legally valid. Most states require a doctor to sign a DNR as well.
If you have a DNR, it is recommended you keep it on your refrigerator as firefighters and paramedics are trained to look there for such documentation.
Why should I have a living will?
A living will helps medical personnel know and understand your wishes so there is no confusion or misunderstanding at the hospital. It is the best way for your wishes regarding end-of-life treatment to be honored.
A living will also helps your POA make a really tough decision: whether to terminate life-support. Losing a loved one is hard enough, but making the decision to terminate support makes the loss even greater. Having this document in place will help someone avoid feeling guilty for making this decision. It allows your POA to know and be comforted by the fact that they are honoring your wishes. It is very difficult for family members to make a decision to withhold support without knowing what their loved one wanted.
HIPAA Laws
What Is HIPAA?
The Health Insurance Portability and Accountability Act (HIPAA) is federal legislation signed by Congress in 1996. This legislation helps ensure that all medical records, medical billing, and patient accounts meet certain consistent standards regarding documentation, handling, and privacy. Entities or providers that are in non-compliance with these requirements are subject to civil and/or criminal penalties.
Unfortunately, Congress did not make the rules that govern HIPAA compliance widely known until 2001, which means if your estate planning documents were created before 2001, they are probably not HIPAA compliant. You should meet with your attorney to review for legal changes.
What medical information is considered private?
The HIPAA Privacy Rule sets limits and conditions on the uses and disclosures of personal health information without patient authorization. This is called Protected Health Information (PHI). PHI is information that is identifiable to one individual that relates to their health status, provisions of their healthcare, or in relation to payment for their medical services. It includes such information as diagnoses, treatment information, medical test results, and prescription information. Demographic information such as gender, birth date, ethnicity, and contact and emergency contact information are also PHI. Both physical records as well as electronic records are subject to the Privacy Rule.
Who must comply with HIPAA laws?
HIPAA requires all medical care providers, such as doctors, pharmacies, nurses, and hospitals, or any organization in possession of patient health information to keep all medical information private.
If a medical facility discloses private patient health information without the patient’s consent, it is in violation of the Privacy Rule. To remain HIPAA-compliant, medical facilities should do the following:
- Be guarded during conversation: It is easy to mistakenly disclose information during a casual conversation. Even stating “Jane Smith had a medical examination today,” would be in breach of HIPAA regulations.
- Public area wariness: It is never acceptable to discuss patient information in hallways, waiting areas, or elevators, as there is a possibility that sensitive information could be overheard by other patients. Patient records should be stored away from the reach of the public.
- Careful disposal: Never dispose of patient information by throwing it in the trash can. This means private information is available to the public, and as such, this action is in breach of HIPAA regulations.
- Avoid gossip: There is gossip in every workplace, and it can quickly get out of control. Therefore, access to information should be limited to employees who need the information as part of their job. Violating privacy in this manner can be especially damaging in smaller towns.
- No marketing: It is against HIPPA regulations to disclose private patient information or sell patient lists to third parties unless you have the consent of the patient. This information should only ever be disclosed as a means of providing quality health care.
Can my spouse get access to my health information?
Legally, no one can get access to your medical information unless you have given them specific permission to do so. Each state has set forth requirements of how to grant access. Some states only require that you verbally grant permission. Other states require that permission is granted in writing. If a state requires written permission, under HIPAA that written document must be separate from any other document such as a POA or Living Will.
How do I grant someone access to my information?
For states that allow it, you may verbally tell a medical provider whom you would like to give access to your PHI.
For states that require a writing, a HIPAA Authorization allows you to grant someone access to your PHI. This document allows you to choose the information that can be disclosed and controls who can access the information.
A specific authorization can be filled out anywhere you are receiving medical treatment. A specific authorization only grants that doctor or medical office permission to share your PHI to those listed. A general authorization can grant permission to have any medical provider release your PHI to those individuals listed on the authorization.
Even if you live in a state that only requires verbal permission to release your PHI, it is best to grant this authorization in writing as you may be in a position where you cannot give verbal authority. For example, you may be unconscious, unable to communicate, or incapacitated.
Why should I have a HIPAA authorization?
A HIPAA authorization allows your medical POAs to make informed choices when they are making your medical decisions. Having information regarding your medical condition, diagnoses, and medications will help them choose the best course of action for doctors to take. If they do not have access to this information, they will be asked to make decisions in a vacuum.
Additionally, if you want loved ones to call a hospital to check on you, or ask your doctor how are doing, they will need to have HIPAA authorization to have those discussions.
What if someone discloses my information without my authorization?
Under HIPAA, an individual cannot file a law suit against a provider for violating the Privacy Rule. You may (and should) contact the Office of Civil Rights within the U.S. Department of Health and Human Services (HHS) to file a complaint. You can obtain a complaint form at hhs.gov/hipaa. Additionally, each state’s Attorney General is authorized to bring lawsuits under HIPAA on behalf of individuals. The Attorney General will share any proceeds from a lawsuit with those individuals whose rights were violated.
Improper disclosure of your information may also violate other state or federal laws. If you believe a physician or medical facility is in breach of the Privacy Rule, get in touch with an experienced attorney licensed in your state of residence to discuss any potential claims. As many of these claims have a short statute of limitations, don’t delay.
Personal Property Memoranda
What is a personal property memoranda?
A Personal Property Memoranda (PPM) is a document where you can list specific items that you want to go to specific people when you die. These lists must be referenced in either your will or trust to be legally effective. Meaning if you just handwrite a list it probably won’t work. A PPM should describe the item with as much detail as others would need to know what you are referencing, list who the item should go to, and should be signed and dated.
What types of things can I leave on this list?
You can leave tangible property—items you can touch—such as furniture, jewelry and artwork by a PPM. Cash, accounts, insurance, and real property are not examples of personal tangible property. Some states allow cars to be passed at death per a PPM, but other states require vehicles to pass by beneficiary form, trust or state law. This is because a car is a registered asset, unlike your golf clubs and clothes.
Why should I create this list?
Although most of your personal items do not have physical value, many items have sentimental value for your loved ones. Many families argue over these items when someone dies. It is best to address which family members are interested in what items while you are still alive so that you can help sort out any disagreements, confusion, hurt feelings or disputes.
How do I help resolve fights over my personal items?
Some parents have invited adult children over to go through tangible items and note which items they would like. If more than one person wants an individual item, you can flip a coin, pull for the highest card in a deck of cards, or rotate turns choosing. One pair of siblings chose to rotate a sentimental figurine back and forth at Christmas to each other so they could both enjoy it. If family members see that you are trying to be fair to everyone, it might lessen hurt feelings and disputes.
You can also give items away during your lifetime. This avoids having family resolve who-gets-what at your death. Of course, you should only do this with items you no longer personally use or enjoy.
