I recently met with a senior couple who had lived a fruitful and financially successful life together. They obviously cared for each other and had two children who were concerned with their welfare. The love family members felt for each other was extremely touching.
Unfortunately, the wife “Jane” had been diagnosed with Alzheimer’s Disease in 2009. Her condition had deteriorated to the point she had been placed on medication to control combative behavior. The family worried that Jane would wander out of the house and had put locks on the doors that she could not reach.
When she was still competent, Jane had not signed a power of attorney giving anyone the power to manage her financial affairs. Neither had she given anyone the legal power to make health care decisions for her. By the time I saw her, she could not sign her name.
I want to assure readers that Jane will be fine. She has a fine and loyal family to watch over her. But her family may well have expense and difficulties without the benefit of comprehensive powers of attorney.
Powers of attorney are documents that give someone (the “attorney-in-fact”) the legal right to act in place of another (the “principal”). In Tennessee there are two types of powers of attorney: (1) a “general” power of attorney that gives someone the ability to make financial decisions, execute legal documents, pay bills, and handle other financial matters; and (2) a power of attorney for health care, which appoints someone to make decisions about health matters.
Both types of powers of attorney are often called “durable” powers of attorney. That means that they continue in effect even when the principal has become incapacitated. Obviously, that’s a good thing, since that is precisely the time that a principal needs the assistance of an attorney-in-fact.
Powers of attorney can be effective immediately when signed or they can become effective when the principal has become incapacitated. For example, powers of attorney can be drafted to require a determination by a physician (or even two physicians) that the principal is incapacitated before they are effective. This type of power of attorney is called a “springing” power, because it “springs” into effect at a designated time or event in the future.
Whether clients need a power of attorney that is effective now or only in the future when they are incapacitated depends on the situation. If a client is in in a stable marriage with a trusted spouse, a power that is effective immediately might make the most sense. I have a friend whose brother is a firefighter in another city. She asked him to make the power of attorney for healthcare decisions effective now. My friend knew that if her brother were to be injured, hospitals would not even disclose to her whether her brother had been admitted without a power of attorney that was in effect.
The alternative to a power of attorney could mean a court proceeding to have a conservator appointed. This type of proceeding is expensive and time consuming.
I am often asked about whether people must consult a lawyer to get a power of attorney. I do not spend a lot of time checking the legal websites to determine the quality of their forms. I do know that recently some friends were trying to prepare a power of attorney for their father, who was in the hospital with congestive heart failure, so that they could pay his bills. I looked at the legal form that they had gotten off the web and it would not have been accepted by any bank.
Properly drafted and executed powers of attorney are not that expensive and are an important component in planning for aging and potential incapacity.