What Does a Power of Attorney Do?

If you’ve been designated as another individual’s power of attorney (POA) or you’re seeking to designate one for yourself, know the rights, obligations and restrictions come with this legal naming.

What Is Power of Attorney?

Like a lot of legal endeavors, establishing and enforcing power of attorney (POA) documentation can be an overwhelming process. Still, these essential tools can aid aging adults and their family members create an effective plan to address future care requirements and get peace of mind.

POA documentation enables an individual (the principal) to decide beforehand who they trust and want to act for them should they become unable of making decisions on their own. The individual that will act on behalf of the principal is known as the agent.

Following that, it is important to differentiate between the two primary kinds of POA: medical and financial.

A medical POA (also called healthcare POA) enables a dependable friend or family member (an agent) the capability to make decisions about the care the principal gets should they become incapacitated. A financial POA enables an agent the capability to make financial decisions for the principal. It is not uncommon to designate one individual to act as the agent for both financial and healthcare decisions, but in many cases, it might be a good idea to separate them.

Power of Attorney Rights, Obligations and Restrictions

The powers of a designated agent can be wide-ranging or restricted, subject on how the POA document was written. The following are a couple of instances of the types of decisions an agent could make with each kind of POA.

What a Healthcare POA Could Decide On:

What type of medical care the principal is provided with, comprising of hospital care, surgery, mental care, at home health care, etc. (These decisions are subject to the monetary resources the principal has and the consent of their financial agent.)
What doctors and care providers the principal utilizes.
Where the principal resides. This will include decisions concerning residential extended care, like assisted living, memory care and hospices. Once more, the principal needs to be able to afford their living arrangements and the financial POA needs to consent to these expenses.
What their principal consumes for food.
Who cleans the principal.

What a Financial POA is able to Do:

Accessibility to the principal’s financial accounts for paying for health care, housing requirements and other types of bills.
File taxes on the principal’s behalf.
Make investment decisions on the principal’s behalf.
Gather the principal’s debts.
Administer the principal’s property.
Apply for public benefits on the principal’s behalf, like Medicaid, VA benefits, etc.

What a POA Can’t Do?

General POA documentation that does not contain any restrictions usually gives an agent extensive power over medical and/or financial decisions. Nevertheless, there are still a couple of things that an agent is unable to do. One of the primary rules managing an agent’s power is that they are predicted to act in the best interest their principal.

An agent cannot:

Modify a principal’s will.
Breach their fiduciary duty to act in the best interest of the principal.
Make decisions on the principal’s behalf following their passing. POA concludes with the passing of the principal (The POA can also be appointed the executor of the principal’s will or when the principal passes away devoid of a will, the agent is allowed to then request to become manager of their estate.)
Modify or transfer POA to a different individual. An agent has the right to refuse their appointment any time they wish. Nevertheless, unless the principal appointed a co-agent or substitute agent in the same POA documentation or is still capable of appointing another individual to act on their behalf, an agent can’t decide who takes over their responsibilities.

Source:

Botek, A. (2020, November 12). Things you can and can’t do with power of attorney. Retrieved June 15, 2021, from https://www.agingcare.com/articles/things-you-can-and-cant-do-with-poa-152673.htm

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