One of the most important legal decisions an older adult can make is to designate someone close to them to act as power of attorney (POA) on their behalf. In choosing a POA, a senior is empowering another person to make both financial and – in many cases – medical decisions on their behalf. It’s a big, big responsibility.
That raises a question: if you’re the one being asked to serve as POA, when do you have the right to say no?
Not Everyone is Right for POA Duties
This very interesting article just published on the website NextAvenue deals with this potentially touchy and often anxiety-ridden question, and we think it’s definitely worth a read. We also hope articles like this one might prompt you and your loved ones to schedule a family conference soon, because the issues this article raises are exactly the ones that need to be dealt with ahead of time, not during a medical or financial crisis. The article, written by reporter Deb Hipp, is called “Saying ‘No’ to Power of Attorney Duty,” and the subtitle spells out the predicament well: “Not everyone is cut out to make key decisions when a loved one can’t.”
Hipp asks, “Does the thought of being power of attorney (POA) for a parent or another loved one fill you with dread? Maybe Mom thinks you’d be the best choice to make business, financial or medical decisions for her if she becomes unable to do so on her own because you live in the same town, while your sister lives two states away. Designating you as POA just makes sense. Or does it?” The fact is, mere proximity can’t be the sole reason for choosing a POA. “Not everyone is cut out to be the power of attorney. In fact, there are many reasons that children and others may need to decline.”
Two Chief Types of POA
Let’s start with a brief explanation from the NextAvenue article of what these terms mean. When someone is legally designated as power of attorney, they are usually referred to as the “agent” or “attorney-in-fact.” The person doing the designating, and on whose behalf the POA is acting, is the “principal.” While there are several different types of power of attorney designations, there are two common ones which many families will encounter as a loved one ages: a POA for finances, often called a general durable power of attorney, and one for medical decisions, usually called a health care power of attorney. While the exact terms vary, the duties are fairly clear. The financial POA has authority to handle the principal’s finances, pay their bills, even sell a home. The health care POA is authorized to make health care decisions in the event the principal is incapacitated.
Some people worry that by assuming duties as a financial POA, they somehow become liable for their loved one’s debts, but that’s a common misconception. “Still,” Deb Hipp writes in NextAvenue, “there are plenty of other reasons a person may want to decline being named power of attorney.” Some adult kids aren’t emotionally able to deal with a parent’s declining health. Others are bearing the burden of a young family or a demanding job involving lots of travel, something that can definitely interfere with the duties of a POA. Life circumstances often change: the son or daughter who was the right choice to be POA five years ago now lives in a different city or is going through a personal crisis such as divorce or bankruptcy. Serving as POA for mom or dad might be more of a responsibility than they can reasonably bear.
Three Key Questions
One elder care attorney quoted in the NextAvenue article recommends that people being approached to serve as POA for a loved one ask themselves these three questions before saying yes:
- Are you able to drop everything, perhaps for weeks or months, and make crisis medical decisions?
- Do you have the emotional fortitude to make tough, life-and-death decisions?
- How is your family dynamic? Do you have a brother who is quick to anger or a sister who could be suspicious of your motives when it comes to medical or financial decisions?
If these or other concerns make you doubt your ability to serve effectively as power of attorney, you need to talk face to face with your loved one and be straight up with them. “Be honest and let them know that if something happened to that person today, you’re not in a position to do this,” says one attorney. He also advises his clients to designate multiple people as alternates in case the primary POA is unable or unwilling to serve, something he says happens frequently. Having several trusted POA alternatives is a wise safeguard in your legal planning, since the possibility of a POA being unable to serve is “highly likely,” says the article.
Above all, if you’re asked to serve and would rather not, be up front with those you love. “If you really don’t want to be power of attorney,” the article advises, “you need to be honest with your loved one or friend. In the end, everyone will be better off.”
The Pieces Have to Fit Together
Sound legal planning is an important element of a good retirement plan – but don’t make the mistake of thinking that designating a POA and writing a will is all you need to do! Retirement planning that is truly effective combines these important legal considerations with a solid financial plan, a housing strategy, a medical safety net and a robust family communication plan. When all these are working seamlessly together, you have a LifePlan from AgingOptions. Let Rajiv Nagaich show you the power of this breakthrough in retirement planning. Join him at one of our free, highly popular LifePlanning Seminars, held in locations throughout the area. If you’re ready to become better informed and better prepared, click here for a calendar of upcoming seminars and register online.
Legal, finance, housing, medical and family – they can all work together when your retirement future is being guided by your own individual LifePlan. Age on!
(originally reported at www.nextavenue.org)