How to Obtain a Power of Attorney for an Elderly Parent

As parents age, many adult children face the reality that their parent(s) may become incapable of managing their affairs. Before this happens, parents should consider granting a power of attorney to a trusted agent, such as a family member. While many elders create powers of attorney for their own benefit without involving their children, adult children are more likely to become involved when their parents neglect to plan well in advance for such contingencies. In all cases, it may benefit aging parents to discuss powers of attorney with their family members.

Obtaining power of attorney can be a delicate journey that is equal parts emotional and practical. The journey often begins with a subtle shift in roles—the child becoming the caregiver, the parent needing support in ways they never have before. Whether prompted by a gradual decline in cognitive abilities or a sudden health crisis, having a power of attorney in place may be a critical part of ensuring your parents’ affairs are managed with care and respect.

How to create a power of attorney? Where do you start? How do you best broach this sensitive topic? Let’s explore the path to securing this vital legal authority, balancing compassion with pragmatism at every step.

What is a Power of Attorney

A Power of Attorney (POA) is a legal document in which one person (a principal or grantor) grants authority to another person to make certain decisions on the grantor’s behalf. A POA may be part of an estate plan or created separately.

It’s important to note that when a principal signs a POA, they can continue to manage their affairs if they have not been deemed mentally incapacitated. If the principal is of sound mind and disagrees with the agent, the principal’s decision takes precedence.

How Does a Power of Attorney Work?

Since a Power of Attorney allows a selected agent, often an adult child, relative, or trusted friend, to make significant decisions on the principal’s behalf, the agent is legally required to act in the principal’s best interests. This obligation is known as a fiduciary duty.

Furthermore, the specific language within the document determines the scope and timing of the agent’s authority. Also, when principals sign a POA, they can continue to manage their affairs if they have not been deemed mentally incapacitated. If the principal is of sound mind and disagrees with the agent, the principal’s decision takes precedence.

The Types of Power of Attorney

There are distinct types of powers of attorney, each designed to serve different purposes. They can be tailored to meet the specific needs and circumstances of the principal.

• General Power of Attorney: This grants broad powers to the agent to manage the principal’s affairs, such as financial and legal matters. It is typically used when the principal needs someone to handle many responsibilities.
• Limited Power of Attorney: Also known as a special power of attorney, this type restricts the agent’s authority to specific tasks or situations, such as handling a real estate transaction or managing certain financial accounts.
• Durable Power of Attorney: This remains in effect even if the principal becomes incapacitated. It helps ensure that the principal’s affairs can continue to be managed without interruption in the event of illness or disability.
• Springing Power of Attorney: This type only takes effect upon the occurrence of a specified event, such as the principal’s incapacitation. It remains dormant until the triggering event occurs.
• Medical Power of Attorney: Also known as a healthcare POA, medical power of attorney for an elderly parent gives the agent authority to make medical decisions on behalf of the principal if they become unable to do so themselves. A medical POA differs from an advance directive (also known as a living will) because it provides specific instructions directly to healthcare providers about the medical care the grantor wishes to receive should they become incapacitated. More information about each state’s medical POA or advance directive laws can be found here.
• Financial Power of Attorney: Financial power of attorney for an elderly parent specifically grants the agent authority over the principal’s financial matters, including banking, investments, and property management.

It’s important to carefully consider which type is most appropriate for the elder’s situation and to ensure that the document complies with your state’s legal requirements.

When Does a Power of Attorney Expire?

A POA typically expires upon the death of the principal. However, it can also expire if the principal revokes it in writing or if the document includes a specific expiration date or condition. For instance, a limited power of attorney might be set to expire after a certain period or event. A non-durable power of attorney expires if the principal becomes incapacitated. In contrast, a durable power of attorney remains in effect even if the principal becomes incapacitated, only expiring upon the principal’s death.

The Benefits of a Power of Attorney

Having a power of attorney POA in place offers several benefits:

• Decision-Making Control: A POA allows a trusted individual to make decisions on the principal’s behalf rather than leaving such decisions to a court-appointed guardian or conservator.
• Avoids Court Involvement: Establishing a POA helps avoid the costly and time-consuming process of court intervention to appoint a guardian or conservator if your loved one becomes incapacitated.
• Clarity of Intent: A well-drafted POA clearly outlines your loved one’s wishes, reducing family disagreements and ensuring their intentions are respected and followed.
• Asset Protection and Management: A comprehensive POA can enable the agent to manage investments, real estate, and other financial matters, protecting your loved one’s assets and ensuring continuity in fiscal management.
• Convenience for Travelers: For those who travel frequently, a POA allows an agent to handle financial affairs in their absence, ensuring that important matters are managed without delay.

When to Create a Power of Attorney

Many people begin to discuss a power of attorney with their aging parents when they notice the parent’s need for assistance in managing their affairs or that they are becoming incapable of doing so. But when should a POA be prepared? Most attorneys advise having the elder create a power of well before a crisis arises to ensure their affairs are managed effectively and their well-being is safeguarded. When to consider POA:

• Are your parents struggling to manage their finances, pay bills, and handle banking tasks? A POA allows a trusted individual to take over these responsibilities, ensuring that financial obligations are met.
• Are they dealing with a serious illness or an upcoming surgery? A POA can help manage their affairs, allowing them to focus on their health and recovery.
• Conditions such as dementia or Alzheimer’s disease can impair the ability to make sound decisions. Obtaining a POA before the parent loses capacity can help ensure their affairs are managed how they want.
• If your parents travel frequently, they may need someone to manage their affairs in their absence. A POA helps ensure their financial and legal matters are handled while away.

The grantor must be legally competent to execute a POA, so waiting too long can make the POA option unavailable.

How to Choose an Agent

An agent is typically a trusted relative but can also be a financial advisor or another trusted person. When choosing a POA, the elder should consider key factors such as:

• Trustworthiness – Select someone who will act in your parent’s best interest without personal gain or conflicts of interest. This person should be familiar with the parents’ values, preferences, and wishes.
• Competence – The person selected should have the necessary skills to manage legal, financial, or medical matters, depending on the type of POA needed.
• Willingness – Ensure the potential agent understands and is willing to take on the responsibilities of being a POA agent, as they can be time-consuming and, at times, emotionally draining.
• Proximity – While it’s not crucial, choosing someone who lives close to the parent can be beneficial, especially in emergencies or when frequent in-person interactions are necessary.
• Communication skills – Look for a good communicator, even under pressure, as they will be the primary liaison with medical teams and loved ones.
• Collaborative – a POA should be able to work effectively with attorneys, doctors, accountants, and other professionals.
• Family dynamics – Consider how the choice of POA might affect family relationships and try to minimize potential conflicts.

Before finalizing the decision, it’s important to have open discussions with the potential POA agent about the role’s duties, responsibilities, and scope. You may also want to consult an attorney to ensure the POA document is drafted correctly and complies with state-specific requirements.

In consultation with family members, the elder can choose different individuals for financial and healthcare POAs or name co-agents or successor agents to provide additional support and backup. The goal is to select someone who will honor the parent’s wishes and protect their best interests in all circumstances.

How Does an Elder Set up Power of Attorney?

Setting up a power of attorney (POA) involves several important steps:

Determine the Type of POA

Depending on the elder’s specific needs and circumstances, decide whether a general, limited, durable, or healthcare POA is needed.

Choose a Trusted Agent

Select a reliable and trustworthy person to act as the POA agent or attorney-in-fact. This individual will have the authority to decide on the elder’s behalf.

Draft the Document

Create the POA document specifying the powers you grant to the POA agent. This document must be in writing and clearly outline the agent’s authority.

Sign and Notarize

In most states, the POA must be signed by the principal and witnessed by two adults who are not the agent or someone signing on behalf of the principal. The document must also be notarized.

Distribute Copies

To ensure they recognize the agent’s authority, provide copies of the POA to relevant parties, such as the elder’s bank or doctor.

Be Specific

Sometimes, the lines between financial and healthcare powers of attorney can blur, especially if different people are appointed for each role. This can lead to confusion and even compromise the effectiveness of the POAs. For example, when deciding whether to move to a senior living community, is that more of a financial or healthcare decision? Who gets to make that call? To keep things running smoothly, it’s important to be clear about which decisions each POA is responsible for.

Consulting with a lawyer can help ensure that the POA is appropriately drafted and complies with legal requirements, especially if you have specific needs or concerns.

Can You Change the POA Agent?

The POA can list a primary agent with additional agents if the primary person cannot serve.

What Happens if a Parent Does Not Have a POA?

Not having a POA makes it more challenging to manage important personal decisions and may require going to court to have a conservator appointed. In such a case, there can be disagreement among family members, and the grantor’s wishes may not be followed.

How to Start the POA Conversation with Your Parents

Here are some tips for approaching the conversation about power of attorney (POA) with your parents in a sensitive, non-pressuring way:

• Recognize the Power is granted to another by the parent for the parent’s benefit
• Start early.
• Frame it positively.
• Listen more than you talk.
• Take it slow.
• Offer to help, not take over.
• Seek professional advice together.
• Respect their autonomy.
• Be patient and understanding.

Remember, the goal is to have an open, honest dialogue that respects your parents’ feelings and autonomy while addressing important future planning needs.

Peace of Mind

Having a power of attorney can give families the authority to assist an elderly parent or loved one, fostering a sense of empowerment rather than feeling overwhelmed. Additionally, a power of attorney clarifies who is responsible for specific decisions, helping to establish a clear communication structure among siblings and other family members as they collaborate to meet their loved one’s needs.

Where You Live Matters

Where You Live Matters is powered by the American Seniors Housing Association (ASHA), a respected voice in the senior housing industry. ASHA primarily focuses on legislative and regulatory advocacy, research, and educational opportunities and networking for senior living executives, so they can better understand the needs of older adults across the country.