In my blog post this week I want to talk about the different types of powers of attorney and the confusion people sometimes have concerning what exactly each document allows them to do. Although different people may choose to use different names, I prefer to categorize the ability each of us has to choose someone to make decisions for us by way of executing a written document as, on the one hand financial/legal and on the other hand health care.
When we prepare documents for clients in which they designate someone to make decisions for them we generally refer to these documents as a power of attorney and advance directives for health care. The power of attorney designates an agent to make decisions and take action on the principal’s behalf in the area of financial and legal matters. This typically includes dealing with bank accounts, retirement accounts, investment accounts, insurance policies, real estate etc.
In our office we create a second document – an advance directive for health care which typically includes a health care power of attorney and a living will. As I have written in the past, a living will is a set of instructions concerning what types of medical treatment you would or would not want done, such as in an end of life situation. A health care power of attorney designates someone to make medical decisions, talk with medical personnel etc. on your behalf.
Just the other day we had two different people call with similar questions. They each thought they were agents under power of attorney and could not understand why the documents were not accepted. For example, if I need to talk with an insurance company does that fall within health care or financial? The answer lies within each document and next week I’ll explain in detail.