As an individual ages or their health deteriorates, it becomes increasingly difficult for them to manage their own affairs. As a caregiver, you know this first hand. There are many things you can take over quite easily for your care recipient – like driving them to appointments or cooking their meals – but other areas require establishing appropriate legal authority. In order to make financial or medical decisions on your care recipient’s behalf, a power of attorney will need to be put in place.

What is a Power of Attorney?

A power of attorney is a legal document that allows somebody to act on an individual’s behalf, should they become incapacitated or unable to make their own decisions. Powers of attorney are created separately for financial and medical decisions. The decision making power can be granted to separate people for financial and medical decisions, or to the same trusted person. The individual given this decision making power is called an “agent.” 

As the Consumer Financial Protection Bureau explains, “powers of attorney can be helpful to older people and others who want to choose a trusted person to act when they cannot. Creating a POA is a private way to appoint a substitute decision-maker.” It’s important for powers of attorney to be drafted as soon as possible, because “your loved one needs to create these documents when he or she is still capable of making decisions,” as AARP explains.

It is an enormous decision to give somebody the power over your medical and financial life, and documents will not hold up under scrutiny if your care recipient was not of sound mind while creating them. In cases of cognitive decline, it’s especially important to get these documents in order before the condition progresses.

What is Financial Power of Attorney?

A durable financial power of attorney grants somebody the power to make financial decisions on an individual’s behalf, should they become incapacitated. Financial powers of attorney allow the agent to continue paying an individual’s bills and managing their financial affairs, if they are unable to do it themselves.

It is important for a financial power of attorney to be “durable,” meaning that it remains valid after a person becomes incapacitated. As Legal Zoom clarifies, “an ordinary power of attorney expires if you become mentally incompetent, while a durable power of attorney includes special wording that makes it effective even if that happens.” It is important that your care recipient’s powers of attorney be durable, so that their affairs can continue to be managed as their illness progresses. 

As Illinois Legal Aid explains, a durable financial power of attorney allows the agent to perform a wide variety of legal and financial activities, including: 

• Buy, sell, rent or lease real estate or other property
• Control bank accounts (including paying bills)
• Contribute to or withdraw from a retirement plan
• Deal with any type of insurance or annuity policy
• Handle tax matters
• Buy and sell stocks
• Control safe deposit boxes
• Hire an attorney to file or defend against lawsuits
• Run a business
• Borrow money and mortgage property
• Handle an estate
• Manage Social Security, unemployment, and military benefits

What is Medical Power of Attorney?

A medical power of attorney is part of an individual’s advanced healthcare directive (an advanced directive also includes a living will.) A medical power of attorney functions similarly to a financial power of attorney, in that it gives the agent (also called a “healthcare proxy”) power to make medical decisions on the patient’s behalf, should they become incapacitated. 

Healthcare proxies are able to look to the individual’s living will for guidance, which will outline what medical interventions or treatments the patient would or would not want at the end of life. Illinois Legal Aid explains that agents have a lot of power, including “directing or refusing healthcare interventions or stopping treatment.” The healthcare proxy can also:

• Talk with doctors or other healthcare providers about the individual’s condition
• See medical records and approve who else can see them
• Give permission for medical tests, medicines, surgery, or other treatment
• Choose where the individual receives care and who provides it
• Accept, withdraw, or decline treatments designed to keep the individual alive if they are near death or not likely to recover
• Decide to donate the individual’s organs or whole body if they have not already made this decision themselves
• Decide what to do with the individual’s remains if they have not already made plans
• Talk with the individual’s other loved ones to help come to a decision

What This Means for Caregivers

Powers of attorney become especially important in caregiving relationships. As a caregiver, it’s natural for you to help your care recipient with their medical and financial affairs. However, without the proper documentation and legal authority in place, you could be putting yourself at legal risk. If your care recipient would like your help managing their affairs, ensure they put the appropriate documentation in place.

Advice on Creating Powers of Attorney

While there are many free or affordable online services that your care recipient can use to create their powers of attorney, it is always a good idea to work with an estate or eldercare attorney if possible. An attorney can work directly with your care recipient to document their wishes, providing you and your family with valuable peace of mind.

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