Powers of Attorney

GENERAL (FINANCIAL) POWERS OF ATTORNEY:

What is a Power of Attorney?

A Power of Attorney is a legal document by which one person, as principal, appoints another as an agent (attorney-in-fact) and gives him/her the authority to perform certain specified acts or kinds of acts on behalf of the principal person. It should go without saying that the appointed agent should be someone known and trusted implicitly by the principal.

Is a Power of Attorney more important than a Will?

Have you considered who would handle your affairs, including making financial and healthcare decisions, should you (or your loved one) become temporarily or permanently disabled? Did you know that a spouse does not automatically by law have the legal authority to handle the affairs of the spouse in the event of disability? And, if a spouse does not automatically have the legal authority to handle the affairs of the other spouse, obviously, an adult child would not have the authority to handle a parent's affairs as well.

How does one obtain legal authority to handle another individual's affairs? There are generally only two ways:

• Have the individual grant you that authority by signing a Power of Attorney; or
• Obtain guardianship over that person.

A Power of Attorney is signed by an individual with the mental capacity to execute a legal document. A legal guardian is appointed for an individual who no longer has the mental capacity to sign a Power of Attorney. If one does not sign a Power of Attorney while he or she has the mental capacity to do so, someone on his or her behalf would be forced to pursue guardianship (which, in Kentucky, involves a jury trial with all the associated court costs and legal fees, etc.). Obviously, signing a Power of Attorney can result in a significant savings in time, trouble, and money.

When is a Power of Attorney effective?

A Power of Attorney takes effect upon delivery of the document to the individual that has been appointed as agent. As such, a Power of Attorney can be held in the principal's possession until such time as that individual is no longer able to handle his/her affairs. At that time, the Power of Attorney should be delivered to the appointed agent. The principal can revoke a Power of Attorney at any time by giving notice to the agent. In any event, the death of the principal automatically terminates the Power of Attorney.

When preparing a Power of Attorney, the following should be considered:

• It should contain language granting the agent all necessary authority to handle the principal's affairs that he/she wishes that agent to handle.
• It is advisable to make the Power of Attorney “durable” so that it can be used after the principal loses mental capacity.
• Consider designating an alternate agent(s) in the event that the primary agent cannot serve.
• It is advisable to have a general Power of Attorney for financial affairs, and a separate Healthcare Power of Attorney (especially with the HIPPA laws regarding privacy for health care issues).

Having a Power of Attorney prepared is quick, inexpensive, and without complications. On the other hand, guardianship is slow, expensive, and complicated, requiring the court system to be involved in the most personal of decisions in your life for the duration of your disability, even for the rest of your life.

HEALTH CARE POWERS OF ATTORNEY:

What is a “Health Care Power of Attorney”?

A Health Care Power of Attorney is a legal document that allows you to appoint another person to make medical decisions for you should you become temporarily or permanently unable to make those decisions for yourself.

What is a “Health Care Surrogate Designation”?

A Health Care Surrogate Designation is part of the Living Will form. It is not as comprehensive as a Health Care Power of Attorney and can be interpreted by health care providers as being limited in authority to making decisions only in the context of a situation in which a Living Will is being addressed i.e., an “end-of-life” situation.

When does a Health Care Power of Attorney take effect?

A Health Care Power of Attorney becomes effective when an individual is temporarily or permanently unable to make his/her own health care decisions and the agent consents to start making those decisions. The agent will begin making decisions after the doctor has decided that the individual is no longer able to make them. Remember, as long as the individual is able to make treatment decisions, Kentucky law gives him/her the right to do so.

What decisions can an agent make?

Unless the individual limits his or her authority, the agent will be able to make almost every treatment decision in accordance with accepted medical practice that the individual could make if he/she were able to do so. If the wishes are not known or cannot be determined, the agent has the duty to act in the best interest of the individual in the performance of his/her duties. These decisions can include authorizing, refusing, or withdrawing treatment, even though it means the individual may die.

As you can see, the appointment of an agent is a very serious decision on the part of the individual.

The Health Care Power of Attorney provides the legal authority to the named individual to make any necessary health care decisions if an individual loses decisional capacity. Not having either document in place could ultimately force a loved one to pursue guardianship on behalf of an individual in order to obtain the necessary legal authority, which involves a jury trial, bonding requirements, accounting requirements, etc.