Planning for the future?
Yeah, we know…thinking about the day when you can’t make decisions for yourself is not fun. And getting a power of attorney sounds like even less fun.
But here’s the thing…
It’s one of the most important legal documents you’ll ever sign.
A power of attorney is a legal tool that grants someone you trust the authority to act on your behalf in case you become incapacitated. And for older adults? It’s absolutely critical.
Here’s the problem:
Only 27% of older adults have a durable power of attorney for medical care. So 73% are totally unprepared to deal with a health crisis that renders them unable to make their own decisions.
I want to help you change that.
I created this guide to explain everything you need to know about powers of attorney for older adults:
- What a power of attorney actually does (NO legal jargon, promise)
- Why every older adult needs one yesterday
- The different types of POAs you should know about
- How to set one up the right way
Let’s do this.
Understanding What a Power of Attorney Actually Does
OK, I said no legal jargon. But let’s cut through the fog here.
A power of attorney is a legal document in which the “principal” (you) gives another person (the “agent”) the authority to act on your behalf. Simple, right?
But let’s get into the details.
Your agent has the power to do things like pay your bills, make healthcare decisions on your behalf, and even sell your house. The scope of authority you give to your agent depends on the type of power of attorney you create.
And here’s the best part:
You have total control. You get to decide who gets the power of attorney, what they can do with it, and when it goes into effect.
Why Every Older Adult Needs a Power of Attorney
Look, I know nobody wants to think about the day they can’t make decisions for themselves.
But listen to the facts. By 2035 for the first time in U.S. history there will be more adults aged 65+ than children. Boom. Population shift.
And the unfortunate reality is that with age comes an increased risk of cognitive decline, strokes, and all the other fun stuff that can rob a person of their decision-making capacity.
If you don’t have a POA in place?
Your family will be forced to go through a long, expensive, and emotionally draining guardianship process just to be able to manage your finances and other legal affairs. I’m talking months of court hearings and thousands of dollars in legal fees.
And here’s the worst part:
If you become incapacitated without a POA, the court will decide who gets to make decisions on your behalf. Not you. Not your family. Not the person you would have chosen if you had a power of attorney. The court.
Creating a power of attorney and naming your own agent while you’re still mentally competent lets you avoid all of that.
The Different Types of Powers of Attorney You Should Know About
Oh, and one more thing before we move on.
Not all powers of attorney are created equal.
Let’s review the main types…
- General Power of Attorney
- Durable Power of Attorney
- Limited Power of Attorney
- Springing Power of Attorney
- Medical Power of Attorney
General Power of Attorney
A general power of attorney gives your agent broad authority to handle your financial and legal matters. Like paying bills, managing investments, signing contracts, and so on.
But the catch: a general POA becomes invalid if you become incapacitated. Which means it’s pretty much useless for elder planning.
Durable Power of Attorney
This is the big one for older adults.
A durable power of attorney remains in effect even if you become incapacitated. In fact, that’s when it kicks in and becomes most important. A durable POA can cover both financial matters and healthcare decisions.
I recommend working with professional elder law services to structure a durable power of attorney that both protects your interests and ensures your wishes will be carried out exactly as you intend.
Limited Power of Attorney
Also called a special power of attorney, this one grants your agent authority over specific matters or for a limited time period.
Example: You need someone to sell your house but you don’t want to grant full financial POA. Or you need someone to manage one of your investment accounts. Limited scope, limited time.
Springing Power of Attorney
This type only “springs” into effect when a certain event occurs — usually, when you become incapacitated.
Cool, right?
Sounds great until you realize there’s a problem. Someone has to actually prove you’re incapacitated, and that can delay urgent decisions and create legal headaches.
Medical Power of Attorney
As the name implies, this POA deals specifically with healthcare decisions. Your agent can make choices about medical treatment, surgery, end-of-life care, and which doctors you see.
It’s important to note this is different from a living will, which documents your wishes. A medical power of attorney actually names someone to make the decisions.
How to Set Up a Power of Attorney the Right Way
OK, creating a power of attorney isn’t rocket science. But you do need to do it the right way. Otherwise you risk the whole thing falling apart when you need it most.
Here’s the process…
Choose Your Agent Carefully
This is the most important decision you’ll make.
Pick someone who:
- You 100% trust with your finances and overall wellbeing
- Has good judgment and the ability to handle stressful situations
- Lives nearby or is willing to travel if necessary
- Shares and understands your values and wishes
Many people choose their spouse or adult children or a close sibling. But others choose a professional fiduciary they can trust to act in their best interests.
The point is, don’t pick someone out of a sense of obligation. Choose the person who’s actually best suited to the job.
Decide on the Scope of Authority
What exactly are you going to let your agent do?
Financial POAs can include:
- Banking transactions
- Real estate transactions
- Tax matters
- Investment decisions
- Insurance issues
Healthcare POAs cover:
- Medical treatment decisions
- Long-term care placement
- End-of-life care choices
- Access to medical records
Be specific and up front about what you want included.
Get it in Writing
Every state has different requirements for powers of attorney.
In general, most states require the following:
- The POA must be in writing
- Your signature
- Notarization
- Witnesses (in some states, the witnesses can’t be your agent)
Here’s my advice on this:
Work with an elder law attorney to draft your POA. Sure, you can find forms online you can download and fill out yourself. But lawyers can make sure your POA is:
- Valid in your state
- Comprehensive enough to cover your needs
- Free of loopholes and other gotchas that could cause problems down the road
The cost of hiring an attorney is a drop in the bucket compared to the cost of a poorly drafted POA that falls apart when you need it.
Tell People It Exists
A POA does no good if no one knows it exists.
Give copies to:
- Your agent (yeah, duh)
- Your back-up agent (yes, you should name one)
- Your doctor
- Your financial institutions
- Any family members who should know about it
Keep the original in a safe but accessible place. Not a safe deposit box — you don’t want your agent to be unable to access it.
Wrapping this Up
A power of attorney is one of the most powerful legal tools an older adult can have.
It’s how you maintain control over your finances and other affairs in the event you become incapacitated. It’s how you avoid forcing your family into expensive court battles. It’s how you ensure that someone you trust is making decisions on your behalf and acting in your best interests.
The statistics on older adults without POAs in place are bad. Don’t be part of that crowd.
Talk to an elder law attorney today. Get your POA in place. Choose your agent carefully.
You’ll thank yourself in the future.
