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The True Powers of a P.O.A

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It’s likely that you have heard that you need a Power of Attorney (POA) document. However, like many legal documents, a power of attorney can be confusing.

Here we break down the things you need to know about a power of attorney and what they do and don’t allow.

Types of POA’s
There are two main types of power of attorney documents that you should know about – medical and financial.

A medical power of attorney, also known as a healthcare power of attorney, will give your caregiver the ability to make decisions about the care you receive if you become incapacitated. A financial power of attorney allows your caregiver to make decisions about your finances if you are unable to do so on your own. It is common for one person to act as the decision maker for both healthcare and financial power of attorney documents, however, in some situations, you may need to separate the two and have two different individuals listed. 

What a POA Can Do


Under your power of attorney documents, your appointed caregiver can receive a broad or narrow scope of abilities based on how the document is written. Here are just a few things that a POA can decide with each type of POA.

Healthcare POA Can Decide:

· What medical care you receive including surgery, home health care, psychiatric treatment, and hospital care.

· What doctors and care providers will treat you.

· Where you live including decisions such as long-term care.

· What you eat.

· Who can bathe you.

A Financial POA Can:

· Access your financial accounts and pay for housing, healthcare, and other expenses.

· File taxes on your behalf. 

· Make investment decisions for you.

· Collect your debts

· Manage your properties.

· Apply for public benefits on your behalf.

What a POA Can’t Do


A general power of attorney document will typically give your caregiver broad power over both your financial and medical decisions

However, there are still a few things they will not be able to do:

· Cannot change your will.

· Break their fiduciary duty to act on your best interest.

· Make decisions after your death unless you have also named your caregiver as the executor of your will.

· Transfer or change the power of attorney to someone else. control the trust while you are alive—and irrevocable.

Some of the most common reasons for establishing a trust include:

· Avoiding the probate process, which is long and expensive in some states

· Planning for long-term care needs

· Restricting access to an inheritance; for example, you may not want your children to inherit money outright until they reach a certain age

· Providing for a family member with special needs.

If you have questions about this or other estate planning tools, give us a call to find out what is best for your needs.

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