What Is A POA?

January 16, 2022 in Uncategorized | MARTIN WREN, P.C. | LEAVE A COMMENT

 Estate Planning Lawyer

As most people are aware of, a will is an important document that helps in the process of estate planning.  There are other documents that individuals should be informed about that assist them through the estate planning process. One example of these key documents is called advance directives, which include Power of Attorney (“POA”) documents and healthcare advance directives.  Although a primary concern for individuals during the estate planning process is to protect their assets, POAs and advance directives are important documents that can assist a person, should there be a point where an individual is deemed incapacitated and cannot make their own financial or healthcare decisions.

What is a POA?

A Power of Attorney (POA) is a type of legal document that allows someone to grant authority to another, so this person can act on their behalf regarding financial decisions and legal matters.  There are two types of POA documents.  The first, and most common nowadays, is a General Durable Power of Attorney.  This type of POA grants the person named in the document the most authority to make financial decisions on your behalf when you are deemed incapacitated.  For example, an agent can assist with real property or banking transactions.  

There can be some limitations of the authority granted by law, but generally, this document will give the agent/person maximum authority to assist in decision making.  However, while you are still capable of making your own decisions, you can do so.  This document will just assist if there is ever a time when you can no longer make your own decisions.  The term “durable” allows the POA authority to extend beyond when a person is deemed incapacitated or when a person dies, whereas previously it would terminate at time of death or incapacity.

The second type of POA document is a Limited Power of Attorney, which gives your agent limited and specific authority to assist in decisions listed in the document.  For example, this may be used to give a person limited authority to sell an item you have for sale while you are out of town.  Most POA documents created are not limited.

What is a Healthcare Advance Directive?

As a very recent change in Indiana law, the advance directive documents have been combined into one document, and certain laws regarding the advance directive have changed.  Previously, there were three ways to set up a health care advance directive, which included a Healthcare Power of Attorney, a Healthcare Representative, and a Living Will.  The new law has made the process more streamlined by combining those into one advance directive, as previously there was some confusion.

This healthcare advance directive allows you to name a healthcare representative that can act on your behalf if you are deemed incapacitated, or assist you in making healthcare decisions while you are still capable.  A few examples of what the representative can assist with are: having the authority to authorize certain medical treatments, discontinuing or refusing life-prolonging procedures, or authorizing a person to apply for public benefits on your behalf.

Multiple representatives can be named, and they can either act according to a priority listed in the document, or they can act jointly and independently.  This document is separate from the General POA listed above because the advance directive grants authority to make healthcare decisions, and the General POA grants authority to make financial decisions.

Why Are They Important?

These documents are important as there may come a time when you are unable to make your own decisions regarding healthcare or finances.  The POA and Healthcare Advance Directive give you the opportunity to name a representative that can assist in making those decisions on your behalf if you cannot do so yourself.  If you do not have these documents naming someone, a person that you did not choose may end up making these decisions instead (there could come a time when one has to be appointed for you or it may go down a line of succession, according to the laws of the state).

Additionally, these documents give you the opportunity to make sure your choices and decisions are represented, and that the person you appointed will follow your instructions (especially through the Healthcare Advance Directive).  It gives you the opportunity to state if you want life-prolonging procedures in place, for example, artificial nutrition.  If you do not have an advance directive, a person may make a choice regarding your healthcare that you may not have wanted.  The POA gives you the opportunity to name someone you trust to assist with financial decisions if you are unable to.  This person can assist in paying bills, have control over your financial assets, or sell a house.  If you do not name someone of your choosing, another person may be appointed by the court that you would not have picked yourself to make decisions on your behalf.

An attorney can assist you with creating and finalizing these documents, in addition to discussing options so you have the most information on how these documents can be a benefit to your specific situation. Furthermore, your attorney can make sure copies are provided to anyone who may need them, for example, the representative named in the document or a physician’s office in the case of the Healthcare Advance Directive. 

Contact Martin Wren Law, today for help with estate planning.

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