Who gets to make important decisions for you if you are in the hospital? What about financial decisions? It is important to have both a medical and durable power of attorney in place to give authority to the right loved ones, and help them understand your wishes.
In this blog post I will describe patient advocate designations and powers of attorney. I will explain the difference between medical and durable powers of attorney, and why you want both as part of your complete estate plan.
Medical Powers of Attorney are often called patient advocate designations. They indicate the person (or people) the doctors should turn to for decisions if you are physically or mentally incapacitated. They can be used to avoid the court appointing a guardian for a temporarily incapacitated individual. Patient advocate designations also usually include HIPAA releases, allowing doctors to disclose confidential medical information to the people listed. These forms often name several individuals in succession, just in case the first person is no longer accessible when the emergency happens. Here's an example:
Danielle signed a medical power of attorney naming her husband Terry as her patient advocate, and her sister Amelia as an alternate. Then Danielle and Terry were in a car accident together. Terry was unconscious and Danielle was in so much pain she could not make medical decisions. Using the medical power of attorney, the doctors couldn't rely on Terry, so they knew to speak to Amelia about Danielle's condition and get her permission to perform treatment.
It is up to the patient advocate to make the hard decisions about your medical care if you can't. Many medical powers of attorney come with a set of medical directives. These are instructions for what you want to happen in particular medical situations. They can give your patient advocate guidance when it comes time to make the hard calls. For example:
Powers of attorney are also used to give authority to another person to make financial decisions and complete financial transactions on your behalf. Some powers of attorney apply only when you would be able to do the same action yourself, but a durable power of attorney for financial purposes (DPOA) says even if you become unable to make your own financial decisions, the person (or people) you designate is authorized to make them for you. A DPOA avoids the time and expense of having a loved one named conservator by the probate court. It allows your designee to pay bills and authorize expenses on your behalf. Here's an example:
Terry gave his wife Danielle durable power of attorney for financial purposes, and named his adult daughter Gwen as an alternate. Terry was then diagnosed with dementia and began to lose the ability to make financial decisions. Danielle was still healthy. She could use the DPOA to pay bills in Terry's name and withdraw money from his retirement accounts to pay for medical treatment. When Danielle passed away, Gwen could step in to make assisted living arrangements for Terry and pay to have someone provide attendant care.
DPOAs cover a much broader range of authority than patient advocate designations. A person with a universal DPOA can make nearly any decision about how to spend your money. It is up to you to put any restrictions on it you may feel are necessary in your particular situation.
It is also important that you choose individuals who can work together for your medical and durable powers of attorney. If your patient advocate wants to approve a treatment that your DPOA holder does not want to pay for, it could take a trip to probate court to sort out what should happen.
Most people create their medical and durable powers of attorney as part of their estate planning process. Because of this, you may think of these forms as only relating to end-of-life care and figure you can put them off until you are older. But medical and durable powers of attorney can be useful at all stages of life. In addition to the difficult decisions made during a loved one's last days, you may also need to use some form of power of attorney to:
Medical and durable powers of attorney help you put your affairs in order by choosing someone now to make important decisions on your behalf later. But it isn't just about preparing for the worst. By speaking with an experienced estate planning attorney now, you can use powers of attorney to make everyday life easier for you, and your loved ones.
Rebecca J. Braun, J.D., is an estate planning and elder law attorney for Mobile Legal Services, PLLC, in Southeast Michigan. She can help with estate planning and trust administration. She will travel to clients, free of charge, in Livingston, Oakland, Washtenaw, Wayne, and Southern Macomb Counties. Contact us for an initial assessment.