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POA – Who Needs It?

by smeneshi - Jun 02, 2016

The Case for a Power of Attorney

 

If you’ve been admitted to the hospital in the last few years or changed doctors, you were likely asked to complete a number of forms.  One of the forms might have asked whether you have an “agent,” “proxy” or a “Power of Attorney.”  Depending upon where you were, you might have been asked if you had a “Medical Power of Attorney,” a “Healthcare Power of Attorney,” or a “Healthcare Agent.” For simplicity, I will refer to these terms generally as a “POA,” which is short of Power of Attorney.

If you’re like most people, you probably read the form a few times trying to figure out what it was really asking – or just skimmed past the question altogether – before answering “no.”  Unfortunately, you may have made a big mistake.

The purpose of this article is to help clarify what a POA is, why it’s important, and how to get a POA.

 

What is a Power of Attorney?

 

When used in a medical setting, a proxy, agent or POA mean the same thing.  In simple terms, it means the person you have chosen to make medical decisions for you if you are unable to make them for yourself.

 

This is different from a having a living will, which is used for terminal situations and end of life decisions.

 

For example, if you were in a car accident and unconscious, but not in danger of dying, and the doctors believed the best course of action was to run a risky test, your POA would make that decision for you.  The person would also be able to ask for a different opinion if he or she felt it was necessary.  Conversely, if you were in a car accident and suffered terminal injuries and the decision was whether to keep you alive in a vegetative state or to withhold life support, your living will would dictate the decision.

 

In most states, minors and adults under directives from the court (such as mentally disabled adults) do not need POAs as they have legal guardians who are allowed to make healthcare decisions for them.

POA

HIPAA and Surrogates

 

Many people believe that a spouse or parent would be their POA in healthcare situations.  This is true to a certain extent, though not completely. The Health Insurance Portability and Accountability Act, or “HIPAA,” restricts the type of information that can be shared by medical professionals to persons other than the actual patient, POA or surrogate.

 

Because of HIPAA, if you were incapacitated, the doctors would have limited freedom to talk to your parents, spouse and loved ones.  They would, for example, be allowed to give status updates and seek relevant medical history about you. They would not be allowed to disclose highly sensitive information, which could lead to problems in diagnosis or medical treatment.

 

In Illinois, if you do not have a POA and are not able to make decisions for yourself, the doctors would select a “surrogate” to make healthcare decisions for you.  The surrogate could be your spouse, parent, sibling or close friend.

 

Doctors selecting a surrogate can cause friction between loved ones and it might also result in private information being shared with a person whom you otherwise might not want it shared with.  Unfortunately it can also lead to poor medical decisions being made on your behalf and it’s why having a POA is so vital.

 

Choosing the Right Person

 

The greatest benefit and challenge to a POA is that you can choose almost anyone to make important healthcare decistion for you.  The person you select should be someone you know well, whom you trust, and would be available when needed. It should also be someone with whom you regularly communicate your health conditions, if possible.

 

If your spouse does not handle stress well, or distrusts hospitals or doctors, choosing him or her would not be the best option.  Similarly, if your parents live far away with limited means to travel, or if you have health problems you don’t want shared with them, they may also not be a good option.

 

Once you decide, it’s important to talk through the POA with the person you selected, and to make sure they are comfortable with every aspect of your decision.  He or she should also be given a copy of the POA form before it is signed so everything that is involved will be understood.

 

You may also want to explain your choice to your spouse and parents, so there are no hard feelings or confusion later.  They may also need to be told that the person you selected will be able to make decisions that trump whatever they think is best for you.

 

It is strongly recommended that you choose a backup person in case your first choice is unavailable.  You will want to go through the same procedures with your backup that you did with your first choice.

 

POA Forms

 

Once you select the right person, it is vital that you properly document your decision.  Many states provide free online template forms you can use. In Illinois, you can find it on the www.illinois.gov website – and a Google search will bring up dozens of other forms.

 

Using a form is better than nothing, but it is still encouraged that you consult with a professional.  Most forms are generic and miss elements that may be important to you.  A professional can also assist you with combining your POA with a living will, or financial POA, which can save you time and effort in the future.

 

Should you decide to use a form or make your own form from scratch, remember that in Illinois the form must be signed by at least one witness who is at least age 18, who is not your doctor, spouse or otherwise related to you.  At the very least, a copy of the completed form should be given to your POA and doctor.

 

Financial POAs

 

By discussing a healthcare proxy, I would be remiss to not touch on financial POAs briefly.  A financial POA is very similar to a healthcare POA, and works under many of the same principles.  There are also some of the same misconceptions about financial POAs as there are with healthcare directives – especially for spouses.

 

When you are married, all assets considered “marital assets,” such as the home, car, and joint banking accounts, are jointly controlled.  If something should happen to you and you were unable to make decisions about finances, your spouse would be able to make decisions for the both of you for all marital assets.

 

If, however, you have any personal assets titled in your  name only such as a car or a separate checking account, your spouse would need to have a POA for him or her to make decisions regarding these finances.  You would also have the right to designate someone other than your spouse to make decisions regarding your personal finances.

 

Adding a healthcare and financial POA to your estate plan is a highly effective way of ensuring your health and financial affairs will be handled with a higher degree of certainty should you become incapacitated.  It will be a relief both for yourself and family members to know you’ve instituted a very solid backup plan “just in case.” Of course, you are encouraged to speak to a legal professional with experience drafting Power of Attorney documents to find the right solution for your needs.

 

Securities and advisory services offered through Ausdal Financial Partners, Inc.  Member FINRA/SIPC 5187 Utica Ridge Road Davenport, IA 52807    563-326-2064  www.ausdal.com.  Public Retirement Planners, LLC and Ausdal Financial Partners, Inc. are separately owned and operated.

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