Powers of Attorney and Patient Advocate Designations
By: Danelle E. Harrington
For most people, a power of attorney is one of the most important estate planning tools available. A power of attorney is a legal document which allows a person (the “principal”) to appoint another individual (the “agent”) to act on their behalf. The principal can delegate their agent to handle various responsibilities. For example, health, legal, or financial responsibilities. There are two major types of powers of attorney: the durable power of attorney and the healthcare power of attorney.
The durable power of attorney is a legal document which enables the principal to designate an agent to act on their behalf. A durable power of attorney authorizes the appointed agent to tend to the principal’s business and financial needs, including day to day banking and bill pay. The principal may also be authorized to enter into contracts on the principal’s behalf and to pursue or defend lawsuits. A power of attorney is only as powerful as the powers that are given to the agent in the document, and therefore, it is very important that the powers listed be specific and encompass all potential tasks.
A durable financial power of attorney usually becomes effective immediately upon signing the document, and the word durable means that it remains effective even if the principal becomes mentally incapacitated. However, some power of attorneys are springing, which means that the agency designation is only effective when the principal becomes incapacitated. Springing power of attorneys should be used with caution, because they can create a “roadblock” when the agent needs to act. The durable power of attorney is a very powerful tool. If a person becomes mentally incapacitated without a durable power of attorney in place, no one would be able to step in and take care of their financial affairs unless the probate court appointed a conservator, which is a timely and expensive process.
The healthcare power of attorney with designation of patient advocate is a legal document which enables a principal to designate a person – a patient advocate – to act as a substitute decision-maker for health care issues. By law, a designated patient advocate is not permitted to act until the principal is incapacitated, and two healthcare providers determine that the principal is unable to participate in their medical decisions.
The authority conveyed to your agent or patient advocate should clearly outline the powers delegated. In addition, patient advocate designations should provide guidance to the nominated patient advocate about your desires, including philosophical, moral and religious beliefs, as they relate to your health care and end of life beliefs. Everyone’s desires are different and therefore every financial and healthcare power of attorney should be carefully drafted to fit each person’s particular needs.
Sharon A. Burgess and Danelle E. Harrington practice in the areas of probate/estate planning, long term care planning and elder law, and business and real estate transactions at SMITH BOVILL, P.C. Their articles are intended to introduce various issues arising within this field of practice and are not intended to replace individual legal advice. If you have questions, please contact Sharon or Danelle at one of the firm’s two convenient office locations in Frankenmuth and Saginaw.