I’ll Always Be Able to Make My Own Decisions … Won’t I?
By Darleen Hinrichs
None of us likes to think about a time when we may not be able to make decisions for ourselves. We may never face this, but it is still important to plan ahead for the possibility. We carry health insurance even though we don’t want to get sick. In the same way, it is important to have an official plan in place in the event our reasoning or ability to communicate may become impaired.
A Power of Attorney (POA) is an important legal tool that protects you if you are not able to act in your own best interest. When you sign a Durable Power of Attorney (DPOA) document, you have assigned an agent who will act in your place if you are incapacitated. Without it, no one can act legally on your behalf without going through a court process. This means your loved ones cannot pay bills, deal with insurances, manage assets or even file taxes for you when you are unable to do so. The impairment does not have to be a permanent disability; it could be short term, as with a medically induced coma or confusion caused by medication.
There are two types of power of attorney:
- Healthcare POA: This person is limited to making medical decisions on your behalf when you are unable to speak for yourself. This is also called Healthcare Surrogate.
- Financial POA: This person can make legal and financial decisions on your behalf when you are unable.
These are generally two different documents and it is important to have both. The remainder of this article will deal with the financial DPOA.
A Power of Attorney grants authority as long as the signer is able to act on his or her own behalf. Its authority ends when the signer is incapacitated. A Durable Power of Attorney remains valid and in effect even if you become incapacitated and unable to make decisions for yourself. If a power of attorney document does not clearly say that the power is durable, it ends if you become incapacitated.
It is a good idea for every adult to have a DPOA, and especially important to sign this document before any impairment occurs. For example, in the late stages of Alzheimer’s, the person may no longer be “of sound mind” and will be unable to appoint their representative. One will be appointed for them by a court, and it may not be the person they would have chosen.
Neither healthcare nor financial POAs go into effect until the person is incapacitated. Therefore, if you sign a DPOA today, you continue to make your own decisions unless you become incapacitated. Likewise, if your impairment is temporary, once you have recovered you make your own decisions again.
You can determine the scope of authority you are giving your DPOA. For example, you may grant only the authority to pay bills or sell certain assets. On the other hand, you could grant authority over all financial decisions, including selling the family home, managing all assets, and dealing with the IRS.
Some people dread signing a DPOA because they feel that it means they are losing their independence. In reality, the document does not determine a person’s independence. It simply allows them to choose who can act for them if ever they cannot act for themselves. Another common fear is that the agent they appoint may go against their wishes. That is why the decision should be made wisely.
The choice of a DPOA should be someone you trust — someone to whom you would hand your checkbook today. It should also be someone who could stand up to others who may disagree with their decisions on your behalf. You should always tell the person you choose that you have done so. Also, discuss your wishes with this person and tell them the scope of the responsibility you are granting. The DPOA document can be changed or revoked at any time, as long as the person who signed it is competent. Otherwise, it stays in force until the signer dies. It does not grant authority after death.
If you have been asked to be DPOA for someone, learn all you can now about how this person would want their affairs handled. If that day ever comes, be sure you honor their choice by acting according their wishes and not your own preferences.
To learn more about the durable power of attorney, speak with a lawyer who has expertise in estate planning.
About the author:
Darleen Hinrichs has worked for Advent Christian Village for 23 years, the last five years as Senior Director of Donor Engagement. In her role, she helps people fulfill their gift intentions for ACV’s ministries. Previously, she served as a Service Coordinator and as Director of Communications at ACV. She and her husband Wayne live in Dowling Park.
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