Financial vs. Medical Power of Attorney: An OverviewA medical power of attorney authorizes healthcare decisions to be made on your behalf by a designated individual, while a financial power of attorney allows for an authorized individual to oversee your finances if needed. Show
In general, a power of attorney is a document authorizing someone to make decisions on behalf of another person. The person who gives the authority is called the principal, and the person who can act for the principal is called the agent, or the attorney-in-fact. You can designate both a financial and a medical power of attorney in the event that you're unable to make those choices yourself. A medical power of attorney and a financial power of attorney are typically created in separate legal documents. Both are known in legal terms as advance directives. Generally, the law addresses each type of advance directive separately, which limits their authority. Key Takeaways
Choosing people you trust to hold your medical and financial powers of attorney gives you more control over your interests and ensures your wishes are followed. Knowing the differences between these two designations will help you decide whether you should appoint the same person to hold both of these directives for you. This article will explore the advance directives known as medical power of attorney and financial power of attorney: what they have in common and what important distinctions can be made between these two legal actions. Financial Power of AttorneyA financial power of attorney permits someone you have designated to oversee your finances. Typically, it is used so the person can step in and pay your bills or handle other financial or real estate matters. That person can be a financial professional acting on your behalf, or you may use it to designate a trusted friend or family member to handle matters if or when you cannot physically or mentally do so yourself. In some cases it may also be used for isolated, one-off situations where it is not convenient for you to be present, such as a real estate closing in another city. How a Financial Power of Attorney WorksA power of attorney can take effect as soon as you sign it, or upon the occurrence of a future event. If the power of attorney is effective immediately, it can be used even if you are not incapacitated. If its powers are "springing," they don't go into effect until a future event has occurred. The most common future event is the incapacity of the principal. Incapacity only occurs when the principal is certified by one or more physicians to be either mentally or physically unable to make decisions. Incapacity can be due to such things as mental illness, Alzheimer’s disease, being in a coma, or being otherwise unable to communicate. If it never becomes necessary, your agent may never use a power of attorney. In many cases, a financial power of attorney may be designated to a professional as part of routine financial management. A financial POA can give someone else control of your assets and may be very difficult to revoke. Never grant a power of attorney to someone you do not completely trust. Many states have an official financial power of attorney form. Many banks and brokerage firms also have their own power of attorney forms. If your financial concerns include buying or selling real property, or a title insurance company, the lender or closing agent may require the use of their specific form. So, it is possible you may end up with more than one financial power of attorney form. Generally, a financial power of attorney must be signed before a notary public. Especially if the sale or purchase of real estate is involved, it may also need to be signed before witnesses. Depending on the state you live in, your agent may also be required to sign to accept the position of agent. Once a power of attorney has been executed, the original document is given to your agent. The agent can then present it to any third party as evidence of their authority to act for you. For example, they could present it at the bank in order to withdraw money from your bank account or use it to sign papers for you at a real estate closing. You are legally obligated to a third party who relies on the power of attorney in dealing with your agent. How to Choose a Financial POAIn choosing a financial power of attorney, you will want to weigh whether the person is trustworthy and has enough financial acumen to handle the
responsibilities. Thanks to online banking and electronic billing, the person doesn’t necessarily need to be nearby to ensure that your bills are paid promptly. There is no accepted way to amend a power of attorney. If you want to amend a financial power of attorney, the best option is to revoke the existing document and have a new one prepared. Steps for Establishing a Financial Power of AttorneyHere is a basic outline for the process of establishing a financial power of attorney:
Example of a Financial Power of AttorneyRoberta is a college professor who is planning a year-long sabbatical in Spain. Since she will remain in the country for a year, she will not be able to execute her financial dealings in Chicago. She appoints her mother to act as her financial power of attorney for her property and investments. Her mother will write checks and sign important documentation related to her investments and property. In order to create a power of attorney, the individual must be mentally competent. If your parent or other older adult relative becomes incapacitated, it will be too late to authorize power of attorney, and courts will likely need to get involved to appoint an individual to help manage the person's affairs. Medical Power of AttorneyA medical power of attorney or healthcare proxy designates an individual to make medical decisions for you when you no longer have the capacity to do so. The person you choose to make health care decisions on your behalf when you cannot is referred to as your agent. Any competent adult can be your agent, but it's important to keep in mind that some states do not allow your agent to be your physician or health care provider; an employee of your physician or healthcare provider (unless the employee is your relative); your residential health care provider (a nursing home, for example); an employee of your residential health care provider (unless the employee is your relative). If an individual has any of the aforementioned designations, they cannot act as your agent for the purposes of a medical power of attorney in some states. This may be needed temporarily (if, for example, you're under anesthesia and surgery complications arise) or for navigating a longer-term health crisis. The medical power of attorney will only go into effect when you do not have the capacity to make decisions for yourself regarding medical treatment. How a Medical POA WorksA medical power of attorney will focus only on health-related decisions and will be written according to the exact specifications of the individual making the directive. As such, a medical power of attorney can include provisions for a wide range of medical actions including personal care management, hiring a personal care assistant, deciding on a medical treatment, and making decisions on medical treatments overall. The Commission on Law and Aging provides the public with a very basic medical power of attorney form that can be used in most states. Some websites also provide basic templates for medical power of attorney. In most states, a medical power of attorney must be signed and notarized by a notary public before it is a binding legal document. You may also be required to have witnesses present when your medical power of attorney is signed. Neither a healthcare professional nor a lawyer is necessary to create a medical power of attorney. You can revoke your medical power of attorney at any time. You can also complete a new medical power of attorney and designate a new agent. How to Choose a Medical POAMany people have strong feelings about the kind and degree of medical treatment they want. This is why it's important to think carefully about whom to appoint; the person you choose should be someone you can expect to make decisions similar to those you would make for yourself. This person should be over 18-years-old and be someone you trust with whom you can discuss your wishes frankly. You should ask the person you select if they feel able to take on the responsibility. Keep in mind: this person may be making very difficult choices, including ones that may end life by ceasing medical care. Not every person is prepared for this responsibility. You will also want to consider whether the person is close by and can meet with your doctors should the need arise. Usually, you appoint only one person as your medical power of attorney, though you can name alternates for situations when that person might not be available. You will also want to consider whether the person is close by and can meet with your doctors should the need arise. Steps for Establishing a Medical Power of Attorney
Example of a Medical Power of AttorneySharon's mother's kidneys are failing. She wants to organize her medical and financial documents for her. A medical power of attorney is recommended for everyone, but especially those with a serious, progressive illness. However, it is important that Sharon's mother is well enough to understand what she is doing when she creates these documents. A medical power of attorney will communicate the treatment wishes of Sharon's mother in the face of a crisis. Sharon lives in Ohio, so she uses the form that is written into Ohio's state statutes. Because Sharon wants to address all the nuances of her mom's health and directives, she gets advice from an attorney after her mother's medical power of attorney is drafted. A medical power of attorney is different from a living will, which is a document that spells out what medical care you do and don't want in the event that you're unable to communicate those preferences for yourself. Why You Need BothIt is possible for the medical power of attorney and financial power of attorney to be the same person. Many people do choose this route, appointing one person such as a spouse or adult child to both roles. However, medical and financial powers of attorney can be created and designated for a variety of different reasons. It may sometimes be preferable and more prudent to ask different people to take on these roles. While it is possible to assign medical and financial responsibilities in a single legal document, it's not usually a good idea. A medical power of attorney will have access to sensitive health information that a financial broker does not necessarily need to know. Likewise, a financial power of attorney will include many details about the subject's assets and wealth that would be superfluous to someone making medical decisions. Selecting a different person for your financial power of attorney and your medical power of attorney may help you choose the best person for each job. If you do select different people for each role, you
may want to consider how they might work together. In the event that you become incapacitated, your medical power of attorney will be responsible for making healthcare decisions, while your financial power of attorney will make sure your bills get paid. You will need to pick people who work well together in order to accomplish these roles. Power of Attorney vs. Executor of a WillBoth a power of attorney and an executor of a will are persons that are legally appointed to help another person manage their finances and affairs when they are incapacitated. The difference is that a power of attorney manages someone's affairs while they are still alive, whereas an executor of a will manages someone's affairs after they've died. Power of Attorney vs. Living WillA medical power of attorney is also called a healthcare power of attorney (HCPA). This document is different than other legal documents related to end-of-life- healthcare decisions, such as an advance directive, living will, or a do-not-resuscitate (DNR) order. An advance directive is a living will documenting one’s wishes for end-of-life medical treatment. (An advance directive is sometimes referred to simply as a living will.) A do-not-resuscitate (DNR) order, also known as a do-not-attempt-resuscitation (DNAR) order, is written by a licensed physician in consultation with a patient or surrogate decision-maker. A DNR indicates whether or not the patient will receive cardiopulmonary resuscitation (CPR) in the setting of cardiac and/or respiratory arrest. As part of your estate planning, you may also consider creating a revocable living trust. A revocable living trust is a trust document that can be changed over time. This type of trust appoints a trustee to manage and administer the property of the grantor, and it can minimize estate taxes. What Does a Medical Power of Attorney Allow You to Do?A medical power of attorney is a legal document you use to name an agent and give them the authority to make medical decisions for you. An agent can decide the following for you:
Is There a Difference Between Power of Attorney and Medical Power of Attorney?A power of attorney is a general legal term for a document that gives someone you trust the legal authority to act on your behalf. A medical power of attorney specifically gives the agent the authority to make decisions concerning the health care of the principal if the principal becomes unable to make those decisions for themselves. How Do You Write a Medical Power of Attorney?The basic requirements for what must be included in a medical power of attorney are similar throughout the country. However, some states require more evidence, such as the signatures of witnesses present during the execution of the document. It's important that you research your state's requirements. Many states have a standardized form that residents are encouraged to use. It will include all of the necessary language that makes the power of attorney designation effective. Can a Doctor Override a Medical Power of Attorney?No, a doctor cannot override a medical power of attorney. Your doctor is obligated to follow the direction of the person you designate as having medical power of attorney over you. What Happens If You Don’t Have a Medical Power of Attorney?The rules in every state are different. However, what usually happens is that the court steps in and appoints someone to take care of your medical decisions for you. This person will be called a conservator. In most cases, the court will appoint a close family member for this role. The Bottom LineA power of attorney allows you to make arrangements for your medical and financial decisions in the event you are incapacitated or otherwise incapable of doing so yourself. Creating a medical power of attorney and financial power of attorney is generally regarded as a smart part of every estate plan. Which of the following are correct procedures for signing medical office letters quizlet?Which of the following are correct procedures for signing medical office letters? If the medical assistant is authorized to sign letters for the doctor, sign the doctor's name and initial after it. If the doctor prefers to sign all letters, place the letters on the doctor's desk in a file marked "for your signature."
What is the most common type of letter written in the clinic or doctor's office?The most frequently used forms of written communication are referral and discharge letters.
What are form letters when are they used in the medical offices?A form letter is a letter written from a template, rather than being specially composed for a specific recipient. The most general kind of form letter consists of one or more regions of boilerplate text interspersed with one or more substitution placeholders.
How many lines should be used to accommodate the physician's signature on a business letter?The most common closing in a business letter is “Sincerely,” but closing choice is at the physician's discretion. Four or five lines should be left between the closing and the physician's typed name to accom- modate the physician's handwritten signature (see Figure 7-4).
|