Powers of Attorney
Stepping Up & Stepping In
It is a great honor to be named Agent for another person in a Power of Attorney. It means that that person (the Principal) trusts you enough to make decisions for her in the most important areas of her life – her health or her wealth. With great power comes great responsibility. How do you know when to Step Up to the job and when to Step In to make decisions?
Ohio law provides for two types of power of attorney: Power of Attorney for Health Care and Power of Attorney for Finances.
A Health Care Power of Attorney names the person or persons who can make decisions about medical treatment. This includes choice of doctors, placement in a rehab or nursing home, specific procedures and medications, as well as, do not resuscitate orders and other end of life decisions. The Agent under a Power of Attorney for Health Care can only act, however, if the Principal is incapacitated to the point where she is unable to make decisions for herself.
An Agent under a Financial Power of Attorney (sometimes simply called a “Durable Power of Attorney”) may be authorized to handle bank and brokerage accounts, IRA’s, contracts, sale or purchase of cars or real estate, life insurance and other financial matters. The agent is limited to only those matters specified in the document. The Financial Power of Attorney generally allows the Agent to handle these matters even if the Principal is still capable of doing it herself.
An Agent is bound to do what the Principal reasonably expects, to act in good faith and always in the Principal’s best interest. When acting as the Agent, you should disclose your identity as well as the Principal’s signing (“Principal’s Name”) by (“Agent’s Signature”) POA.
How will you know when the Principal needs you to start acting and what you will need to do?
When you receive your paperwork, talk to the Principal about her health and/or wealth and expectations. Go through documents together, the bills she pays, the medications she takes, the names of her doctors, bankers, stockbrokers, insurance agents, etc. Let family, friends, and neighbors know to call you in an emergency.
If you are named as Health Care Agent, consider visiting doctors with your Principal and have her sign a HIPAA release so that you can ask the doctor questions and look at medical records even if your Principal is still able to make decisions for herself.
If you are named as Financial Agent, you might help your Principal sign up for automatic deposits and automatic payments of utilities and other regular bills. This will reduce the burden on her and allow her to continue managing her own business longer. Meet periodically to review statements and balance the checkbook or consider signing up to monitor her accounts electronically.
You must keep contact with your Principal regularly to know when her capacity is diminished and it is time to Step In and make decisions. You may notice confusion, physical disability, or changes in mood, housekeeping habits, or hygiene. Missed appointments, unpaid bills, unfilled or untaken medication, weight loss, unexplained damage to the car, and falls are all signs that your Principal may need your help.
Check the refrigerator to be sure there is fresh food. You may need to help with the shopping or arrange for meals to be brought in. If your Principal can no longer use a stove safely, you may need to disable it.
When your Principal can no longer drive safely, you may need to talk with her doctor about having her license revoked or disabling or selling the vehicle. A Principal will often accept these restrictions more easily coming from her doctor rather than a relative or friend. If she continues to drive while impaired it is possible her insurance company will deny claims because of recklessness.
If your Principal is unable to drive, assist in arranging transportation. Isolation may become an issue. Regular phone communication, home health services and adult day care can help your Principal remain at home longer. If health care or other workers are in the home, check frequently to be sure your Principal is getting proper care and no items or money is missing. Be sure the workers are properly screened, bonded and insured.
When care at home is no longer possible, you will need to arrange placement in an Assisted Living Facility or Nursing Home. Visit facilities with your Principal if possible on multiple occasions and at different times of the day. Talk to residents and their families. Stay for a meal and a tour or consider a short respite stay to try it out.
If your Principal is resistant to a move, but unsafe at home, talk to the doctor. It is far easier to move to a facility upon doctor’s orders from a hospital or the doctor’s office than to attempt a direct placement from home by force or deceit. Later, when your Principal asks to go home, you can say with conviction that she can return home when her doctor says she can.
As Financial Agent, you will need to see that your Principal’s bills are paid and that her estate plan is followed if you know what that plan is. You must see that taxes are paid and that required minimum distributions are taken on IRA’s. You may need to make a claim on long term care insurance or Medicaid if necessary. Keep careful records of everything that you do on the Principal’s behalf.
Stepping In as agent can be a difficult and thankless job. If the Principal is unhappy with what you are doing – right or wrong – she can remove you since the power came from her in the first place. If this should happen and you feel your Principal is incapacitated and unsafe, your only resort may be to seek authority from the court in a guardianship proceeding. If you are in doubt as to your responsibilities or need assistance in understanding any of your duties as agent, seek the advice of a qualified elder law attorney.