General Financial Power of Attorney
A General Power of Attorney is the most most important legal document that a person can have, and is an essential part of every Incapacity Plan and Estate Plan. A General Financial Power of Attorney (always “durable” when used in connection with estate planning) authorizes your agent, sometimes called “Attorney in Fact,” to act on your behalf and sign your name to financial and/or legal documents.
The General Power of Attorney is an essential tool in the event that, due to age, illness, or injury, you are unable to carry on your legal and financial affairs. Having a General Power of Attorney avoids the “nightmare of living probate” — the time consuming, expensive, and publicly embarrassing process whereby someone has to go to court to have you declared mentally or physically incompetent.
Then, one or more persons needs to be appointed to serve as your legal guardian and/or conservator, which process is subject to ongoing court supervision. State laws vary regarding the use and acceptance of a power of attorney, and most financial institutions have their own rules about Powers of Attorney.
It is important to understand that not all Power of Attorney forms are the same — there are no “standard” forms. A Power of Attorney can be customized for every individual based on that individual’s desires.
Asset Protection Powers
From an Elder Law perspective, the most important provisions in a General Power of Attorney are “asset protection powers.” These powers include, among other things, the ability of your agent to make unlimited gifts and the ability of your agent to establish, fund, and terminate all types of trusts, both revocable and irrevocable.
These asset protection powers can be essential for implementing important asset protection strategies if you become disabled or need long-term nursing home care and want to avoid having to go broke paying for nursing home care.
Most Power of Attorney “forms” that you will find on the internet or obtain as part of your basic estate planning done by an estate planning attorney or general practice attorney do NOT contain these vital asset protection powers. Typically these essential asset protection powers are provided only if you have your Power of Attorney prepared by an experienced Elder Law Attorney, preferably a Certified Elder Law Attorney.
Medical Power of Attorney
A Health Care Power of Attorney (also called a Medical Power of Attorney or an Advance Medical Directive) authorizes another person (called your “Medical Agent”), to make decisions with respect to your medical care in the event that you are physically or mentally unable to do so, as certified by two physicians.
This document includes the type of provisions that used to be in what was commonly called a “Living Will,” allowing you to indicate your wishes concerning the use of artificial or extraordinary measures to prolong your life artificially in the event of a terminal illness or injury.
You will also use this document to indicate your wishes with regard to organ donation, disposition of bodily remains, and funeral arrangements. An advance medical directive is a separate legal document whereby you appoint an agent and give that person the power to consent to medical and health care decisions on your behalf with regard to providing, withholding, or withdrawing a specific medical treatment or course of treatment when you are incapable of making or communicating an informed decision on your own behalf.
This document communicates your desires to your physicians and family members regarding all forms of medical treatment, and may be used to instruct your physician to withhold specific life prolonging procedures if at any time you are diagnosed as having a terminal condition and your physicians have determined that there can be no recovery from such condition and your death is imminent.
Your Advance Medical Directive should also set forth your preferences with regard to organ donation, funeral arrangements, and disposition of remains.
In order to be easily accessible when needed, your Advance Medical Directive should be registered with an electronic archive service that can immediately fax the document to any desired destination. This firm will provide such registration service to you at no charge unless you would prefer that the document not be registered.
Click here for our sample Advance Medical Directive.