Planning for Incapacity

A durable power of attorney allows you to carry on your financial affairs in the event that you become disabled. Unless you have a properly drafted power of attorney, it may be necessary to apply to a court to have a conservator appointed to make decisions for you when you are disabled.  This court-supervised process is time-consuming, expensive (often costing thousands of dollars) and emotionally draining.
 
There are generally two types of durable powers of attorney: a “present” durable power of attorney in which the power is immediately transferred,  and a “springing” or future durable power of attorney that only comes into effect upon your subsequent disability as determined by your doctor(s). 
When you appoint another individual to make financial decisions on your behalf, that individual is called an “attorney in fact” or “agent”. Anyone can be designated, most commonly your spouse or domestic partner, a trusted family member, or friend.  Appointing an attorney in fact assures that your wishes are carried out exactly as you want them, allows you to decide who will make decisions for you, and remains effective should you subsequently become disabled.

Generally, any individual over 18 years of age who is a resident of the state in which it is created and who is legally competent can create a power of attorney

In general, an agent may be anyone who is legally competent and over the age of 18. Often, it is a family member such as a spouse, sibling or a child. While more than one person can be named as an agent, it is usually more prudent to name one individual as agent and then another as an alternate. Naming two or more individuals to act together can prove inconvenient, especially if a power of attorney must be exercised promptly.

Your agent presents the original or a copy of the power of attorney document to the other party involved in the transaction and signs documents on your behalf.  Your agent signs your name,  followed by his or her name and the words “his or her Attorney in Fact”.

 The law allows you to appoint someone you trust – for example, a family member or close friend – to decide about medical treatment options if you lose the ability to decide for yourself.  In California, you can do this by using an “Advance Health Care Directive” (AHCD)  in which  you designate the person or persons to make such decisions on your behalf. You can allow your health care agent to decide about all health care or only about certain treatments.  Your agent can then make sure that health care professionals follow your wishes and can decide how your wishes apply as your medical condition changes. Hospitals, doctors and other health care providers must follow your agent’s decisions as if they were your own. Your AHCD can also inform others of your preferred medical treatment should you become permanently unconscious, terminally ill, or otherwise unable to make or communicate decisions regarding treatment.  These wishes can be written into your AHCD in California. In conjunction with other estate planning tools, an AHCD can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity.

Some medical providers have refused to release information, even to spouses and adult children authorized by durable medical powers of attorney, on the grounds that the 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits such releases.  In addition to the above documents, you should also sign a HIPAA Authorization Form that allows the release of medical information to your Agents, your Successor Trustees, your family and other people whom you designate. This authorization is written into your AHCD in California.