by | May 16th, 2019

I’m often asked by my clients if it’s necessary to have a power of attorney (POA) document as part of their long-term care insurance plan.  My answer is always a resounding yes!

A POA is an important legal document that gives a person — you have choosen — the power to act on your behalf.  No one likes to consider grim possibilities for our future, but what if an accident, illness or simply the effects of aging left you unable to tell your doctors and your family what kind of medical treatment you wanted, or made it impossible to properly manage your financial affairs?

With a valid power of attorney, the trusted person you have named is legally permitted to take care of important matters for you if you are unable to do so yourself – such as paying your bills, managing your investments, or directing your medical care.  To cover all of the issues that matter to you, you’ll probably need two separate documents: one that addresses medical/health care issues and another to take care of your finances.  Fortunately, powers of attorney usually are not too difficult to prepare.

Taking the time to prepare these documents is certainly worth the small effort it will take.  If you haven’t made durable powers of attorney and something happens to you, your loved ones may be forced to go to court to get the authority to handle your affairs.  Also, please keep in mind that these documents aren’t just for the elderly.  I had them created for my children once they became young adults .

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. 

A FINANCIAL POA

A financial power of attorney, or general power of attorney, permits someone you have designated (your “agent”) to oversee your finances. Typically, it is used so the person can step in and pay your bills or handle other financial matters when you cannot physically or mentally handle your affairs.  It may also be used for situations when it is not convenient for you to be present, such as a real estate closing in a distant town.  A power of attorney usually takes effect as soon as you sign it; however, your agent may never use it unless it becomes necessary. 

A MEDICAL POA

Since the power to make medical decisions on your behalf is not included in a general power of attorney, you will need a medical power of attorney that clearly states the person you have named to make medical decisions when you no longer have capacity to do so.  This may be needed temporarily (when you’re under anaesthesia, for instance, and complications arise) or for navigating a longer term health crisis, often related to aging.  Most of us have strong feelings about the medical treatment we want; a medical POA gives you control over these decisions, even when you can’t speak for yourself.  A medical POA only goes into effect when you do not have the capacity to make your wishes known regarding your medical treatment.

NEXT STEPS

Before you decide to get a power of attorney, it is important to familiarize yourself with the common legal terms you’ll find within that document.  It’s also important to know (1) the parties and procedures required to create a valid power of attorney, (2) your options concerning both the effective date and durability of your power of attorney, and (3) the differences between a financial and a medical power of attorney.  These are areas where, for further information, you should contact Fahmy & Associates at (703) 760-4630 or email us at kfahmy@fahmyassociates.com.

— Ken Fahmy

CERTIFIED FINANCIAL PLANNER®   CHARTERED LIFE UNDERWRITER    CHARTERED FINANCIAL CONSULTANT