Almost everyone believes they will make their own decisions, and communicate them, for the remainder of their life. However, many situations prevent people from protecting their own interests.
People should prepare themselves for the unexpected by establishing legal documents that designate somebody they trust to act for them. More specifically, principals can establish powers of attorney, which designate agents to make their important financial and medical decisions.
Which Power of Attorney Gives an Agent Authority to Handle Financial Matters?
With a durable financial power of attorney, most anybody can designate another person to handle his finances. Powers of attorney can take immediate effect, or spring into effect upon the occurrence of a specified event such as illness or injury.
Also, powers of attorney can be very broad or very limited in scope, so people can give their agent as little or as much authority as they wish. In order to be valid, however, people must adhere to the following guidelines when creating a power of attorney:
- The principal must understand the nature and effect of signing a power of attorney.
- The principal must sign the power of attorney willingly.
- The principal must initial any paragraph in the power of attorney that benefits the agent.
- A notary and witness other than the agent, the agent’s spouse, or the agent’s children must sign the power of attorney.
- A power of attorney can be revoked or changed for as long as the principal remains competent.
- The financial power of attorney form itself must meet certain criteria. Free download available here.
Which Power of Attorney Gives an Agent Authority to Handle health Care Decisions?
With a health care power of attorney, people designate an agent to make their medical decisions in the event of an emergency. Health care powers of attorney assure principals that their important health care decisions rest with somebody whom they trust should they become incapacitated.
These powers of attorney are always created in advance of an actual need, and they do not take effect unless and until the principal loses capacity to make health care decisions personally. Health care powers of attorney cover most medical crises, but they do not give agents power to admit principals to an inpatient mental health care facility.
A mental health care power of attorney is required for this additional authority, which is separate from the original health care power of attorney. The mental health care power of attorney can appoint the same agent as under the health care power of attorney or somebody else. Also, it can be created at the same time as the health care power of attorney, or at a later date. Valid health care and mental health care powers of attorney must:
- Clearly declare the principal’s intent to delegate authority to make health care decisions to a specific person;
- Be signed by a principal who is of sound mind and free from duress;
- Be witnessed by at least one adult who is not the agent, a relative or heir of the principal, or directly involved in providing health care to the principal.