Powers of Attorney

We call powers of attorney Personal Protection Documents because their main purpose is to protect you and your wishes.  Your powers of attorney name one or more agents who will — if called upon — act on your behalf.  Your agents must act in your best interests, putting your goals and desires ahead of their own.

There are two types of powers of attorney you should know about: the power of attorney for property and the power of attorney for health care.

Power of Attorney for Property

First is the power of attorney for property, the classic document that people often refer to as just a power of attorney.  This is the real Swiss Army Knife of estate planning tools.  It has so many uses that it is widely considered to be a must have document for anyone age 18 years or older.

A power of attorney for property lets you name someone (your “agent”) who can act for you.  It is called a durable power of attorney when the power of attorney allows your agent to act if you become incapacitated.  But whether it is made durable or not, a power of attorney for property always ends at death.

You can give your agent as few or as many powers as you wish. These are some of the more useful things an agent can do for you:

  • Talk to institutions about your assets, accounts, or policies
  • Transfer, sell or mortgage assets not owned by your living trust
  • Access your safe deposit box
  • Make gifts for planning purposes
  • Apply for public benefits, such as Medicaid, on your behalf
  • Hire an attorney, caregiver, or other professional to perform work for you

Tip: Don’t put off getting powers of attorney just because you’re not absolutely sure who you want as your agent.  You can always change your agents later, but at least you’ll be covered in the meantime.

Without a power of attorney for property, a family member may have to resort to an expensive and time-consuming guardianship process to manage your affairs.  We see this quite often with seniors suffering from Alzheimer’s or dementia.

Unfortunately, some useful kinds of planning and asset protection generally aren’t possible under a guardianship (but would have been available under a power of attorney drafted with elder law in mind).  That can lead to a lower level of care for you and a smaller inheritance for your children.

Power of Attorney for Health Care

Who do you want to make medical decisions for you if you are unconscious?  Illinois law tells doctors to look to your spouse first, and then to other family members.  But what happens if he or she isn’t available or was also injured?  And what if your parents or siblings cannot agree on your medical treatment?

Your health care agent, named in your power of attorney for health care, is the person you want to make those decisions for you.

A power of attorney for health care takes effect in either of two situations:

  • You lack the ability to communicate your wishes for your care
  • You lack the ability to understand the nature of the decisions (and their consequences) that must be made for your own care

There is much more to having a solid plan for your health care than just naming a health care agent.  If you ever need medical care, recent health care privacy laws would severely restrict doctors from talking to family members about your condition or treatment.  A HIPAA authorization gives doctors and hospitals the right to share the health information you want with the people you select.  We also recommend making a living will, spelling out your wishes for the kind of end-stage and end-of-life care you want to receive.