As parents age, it becomes increasingly important to plan for the possibility that they may need assistance managing their financial affairs or making healthcare decisions. Without proper legal documentation, adult children may face significant obstacles in handling their parents’ needs, especially in cases of cognitive decline or medical emergencies.
A power of attorney (POA) is a legal document that designates a trusted individual to act on another person’s behalf in financial, medical, or personal matters. Obtaining a POA before a crisis arises ensures a smooth transition of responsibilities and prevents costly legal battles.
What Is a Power of Attorney?
A power of attorney grants legal authority to a designated person, known as an agent or attorney-in-fact, to make decisions on behalf of another individual, known as the principal. The scope of authority varies depending on the type of POA.
Types of Power of Attorney
- Financial Power of Attorney – The agent can manage financial matters, such as paying bills, handling investments and managing property.
- Medical Power of Attorney (Healthcare Proxy) – Authorizes the agent to make healthcare decisions if the principal becomes incapacitated.
- General Power of Attorney – Grants broad authority over financial and legal matters. However, it typically ends if the principal becomes incapacitated.
- Durable Power of Attorney – When “durable,” the POA remains in effect even if the principal is unable to make decisions due to illness or injury.
- Limited (or Special) Power of Attorney – Provides authority for a specific transaction or period.
Choosing the right type of POA ensures parents receive the support they need while maintaining as much independence as possible.
Steps to Obtain a Power of Attorney for Your Parents
1. Start the Conversation Early
Many families delay discussing estate planning because of discomfort around aging and incapacity. However, waiting too long can result in complicated legal hurdles if a parent becomes unable to grant POA due to cognitive decline.
Approach the conversation sensitively, emphasizing that a POA protects their wishes and prevents unnecessary stress. Highlighting real-world examples of families who struggled without one may encourage proactive decision-making.
2. Determine the Right Type of POA
Assess your parent’s needs and preferences to determine the most appropriate POA. A durable financial POA may be suitable if they require help managing finances. A medical POA is essential to ensure that future healthcare decisions align with their wishes.
3. Choose a Trusted Agent
The person granted POA should be responsible, financially stable and able to handle difficult decisions. While many parents choose an adult child, they may also select a trusted family friend, financial advisor, or attorney.
The agent should be someone who:
- Understands the parent’s values and preferences
- Is capable of managing finances and healthcare decisions responsibly
- Will act in the parent’s best interests without personal bias
Naming an alternate agent is also recommended if the primary agent is unable or unwilling to serve when needed.
4. Draft the POA Document
A POA must be properly drafted and executed according to state laws to be legally valid. While online templates exist, they may not provide the necessary legal protections. An estate planning attorney ensures that the document:
- Complies with state-specific legal requirements
- Clearly defines the agent’s powers and limitations
- Includes provisions to prevent abuse or mismanagement
5. Sign and Notarize the POA
Most states require signing the POA in front of a notary public. Some states also require witnesses, particularly for medical POAs.
Once signed, distribute copies to relevant parties, including:
- Financial institutions (for financial POAs)
- Healthcare providers (for medical POAs)
- Family members involved in caregiving
Keeping the original document in a secure but accessible location ensures that it is available when needed.
What Happens If No Power of Attorney?
If a parent becomes incapacitated without a POA in place, family members must petition the court for guardianship or conservatorship. This process is:
- Time-consuming – Court proceedings can take months, delaying essential decision-making.
- Expensive – Legal fees can accumulate quickly.
- Emotionally challenging – Family members may disagree over who should be appointed guardian.
A properly executed POA prevents court involvement and ensures that a trusted individual is legally authorized to act on the parent’s behalf.
Common Misconceptions about Powers of Attorney
“I’ll Just Handle It when the Time Comes”
Many adult children assume they can automatically step in and manage a parent’s affairs in an emergency. However, financial institutions and healthcare providers will not grant access to accounts or medical records without a POA.
“A Will Covers Everything”
A will governs estate distribution after death—it does not grant decision-making authority during a parent’s lifetime. A POA is essential for managing affairs while they are still alive.
“POAs are Only for the Elderly”
While POAs are critical for aging parents, they are equally important for adults of any age. Unexpected accidents or illnesses can leave individuals unable to make decisions, making a POA a valuable safeguard for all adults.
Key Takeaways
A POA ensures financial and medical decision-making: Without it, family members may need to go through costly court proceedings to obtain legal authority.
- The right POA depends on the parent’s needs: Financial, medical and durable POAs serve different purposes and should be chosen carefully.
- A POA must comply with state laws: Improperly executed documents may not be legally valid, making professional guidance essential.
- Without a POA, court intervention is required: If a parent becomes incapacitated without a POA, family members may need to pursue guardianship, which can be time-consuming and expensive.
- Starting the conversation early prevents future stress: Delaying POA discussions can lead to legal complications and unnecessary burdens for family members.
To learn more about estate planning in the East Valley, Gilbert, Mesa and Queen Creek, schedule your free consultation with Attorney Jake Carlson by using one of the links above.
Reference: A Place for Mom (Aug. 5, 2024) “A Beginner’s Guide to Power of Attorney for Elderly Parents”
