Powers of Attorney are a great planning tool and while most commonly used in the case of one’s incapacity can in fact be useful in many situations.
A Power of Attorney authorizes another person, your agent, to act on your behalf. A Power of Attorney can be executed at any time so long as you are competent, and can also be amended or revoked if you are competent to do so. Most Powers of Attorney are “durable,” meaning they remain effective through periods of incompetency (if this occurs after signature), but terminate upon your death.
There are many types of powers of attorney but the two most common are the General Power of Attorney and the Healthcare Power of Attorney.
A General Power of Attorney authorizes your agent, whom you nominate, to perform certain tasks on your behalf, which are outlined in the power of attorney document. These tasks commonly include managing your finances, paying bills, maintaining real estate, handling taxes, and any other task you authorize your agent to perform.
A Health Care Power of Attorney designates another person, your agent, to make health care decisions for you in the event you are unable to do so yourself. It can also authorize the release of your medical information to your agent; due to privacy laws, without this authorization a hospital or doctor may not be able to release your medical information to the person you wish to receive same. A Health Care Power of Attorney also often includes a Living Will, which states your wishes for care in “end of life” circumstances.
A Power of Attorney can also be limited to authorize another person to act for you in a specific task. A common use of a Limited Power of Attorney is to authorize another individual to sign documents on your behalf. For example, imagine you are selling your home and the closing date is set for the same date you leave for the vacation you have been planning for over a year – you won’t be available to sign documents, but don’t want to delay the closing.
In this case, you can use a Limited Power of Attorney to authorize someone to sign the necessary closing documents for you. The power of attorney is limited to that transaction and expires upon its completion or a designated date. In this case, the Limited Power of Attorney allows you to go on your vacation without delaying the closing on your real estate.
Another use for a Power of Attorney is for students at college. As a young adult, your child is entitled to the protection of their privacy, making their education and medical records unavailable to you. However, if you are financing your child’s education you may like to be able to track how well those dollars are being put to use. Under normal circumstances, a phone call to the registrar of your child’s college will not provide you with access to the student’s grades. A person who has turned eighteen is legally an adult and consequently entitled to protection of their privacy. In this case, a Limited Power of Attorney appointing the parent as agent would allow the parent access to the student’s academic records.
A Health Care Power of Attorney may be helpful to college students and their parents as well. Under HIPAA law, your child’s medical and health information is confidential and may not be disclosed to a parent without a proper waiver.
Consider the scenario where a college student has become ill and phoned the parent, leaving a voice message that the child is going to the hospital. The parent receives the message and immediately calls the hospital asking about their child. However, the parent is told that due to privacy restrictions, the hospital is not able to confirm or deny that the child is a patient and will not disclose the child’s health status or any medical information. In this scenario, a Health Care Power of Attorney would have allowed the parent to receive information about their child. The Health Care Power of Attorney could also contain a provision specifically directing the health care provider to notify the parents if the child has any health emergencies. These specific instructions would need to be brought to the attention of the health care provider when providing them with the document.
Another common situation in which a Power of Attorney may be useful is where a student will be studying abroad. It would be prudent for the student to appoint a parent or other trusted individual as agent under a power of attorney to handle property and financial matters, such as completing financial aid paperwork, handling issues related to deposit of financial aid checks, processing banking transactions, processing insurance transactions, etc. while they are abroad and unable to do so themselves.
Some colleges provide Powers of Attorney to be signed as part of the registration process; you should check to see if your child’s college is one of them.