Frequently Asked Questions
Is it true that a Power of Attorney will protect me if I am sick in the hospital, need an important operation and lack the mental capacity to decide whether the operation is a good thing for me?
No. A Power of Attorney, if done correctly, will protect you if you lose capacity and require help with attending to your property management needs only, such as the interest in your home, your insurance policies, your retirement account and your pension check, among many other things.
A Health Care Proxy would solve your problem if you became incapacitated and needed someone to make an important health care decision on your behalf. Usually, these will be decisions to refuse treatment if the person that you appoint as your health care agent believes that you would not want the treatment under the circumstances. This is because your health care agent believes that you would not want to be kept alive by a machine or a feeding tube. However, the purview of a Health Care Proxy is not limited only to life-ending decisions, but also to decision-making for other health care needs when you are unable to speak on your own behalf.
Do you need to execute a Living Will along with a Health Care Proxy to appoint someone to make health care decisions on your behalf?
No. In New York, the Health Care Proxy was created from a mandate from the Legislature to make it easier for families and friends of incapacitated persons to make health care decisions on their behalf. The Health Care Proxy is 1 page and is very straightforward. Just by appointing a health care agent, it is assumed that such agent knows all of your health care needs. The only treatment which you must specifically refer to in the Health Care Proxy is artificial nutrition and hydration (i.e., tube feeding), which you must refuse in the Proxy itself.
The Living Will is usually a more involved document. Typically, it is several pages long and sets forth many of the treatments that you would refuse if you had the capacity to do so in order for the health care provider to be guided accordingly. While the Living Will works nicely to supplement the Health Care Proxy, it is not necessary to execute one in New York State.
However, because the Living Will is a creature of New York law, if you regularly travel or vacation out of New York State, then it makes a lot of sense to also execute a Living Will.
Moreover, if you are outside of New York State when a health care emergency comes up, you may use the forms that you have executed in New York, as long as they were executed in the correct fashion under New York law. As a result, although to some it may seem that the preparation and execution of legal documents that protect your health care decision-making rights can be done without the assistance of an attorney, it is advisable to consult with an attorney before preparing and relying on those forms.
Five years ago, my real estate attorney had me execute a Power of Attorney prior to the closing on the sale of my house in the event that I could not make the closing. I am older now and worried that at some point I will need help with all of my property needs. I called my attorney and he told me that the power of attorney that he did for me, although very basic, will be enough. Is that true?
Your real estate attorney is surely an expert in the field in which he or she practices. But unless he or she practices estate planning/elder law on a regular basis, you probably should not rely on his or her advice for your estate planning/elder law needs.
A Power of Attorney, if prepared correctly, can give a trusted person that ability to make many types of financial decisions for you if you become incapacitated. These powers can be basic, such as dealing with banking accounts, pensions checks, insurance claims and mortgage payments to more complex issues like electing the correct beneficiary on your qualified retirement accounts or renouncing an interest in an inheritance. Because only an experienced estate planning/elder law attorney can anticipate all of these contingencies, it is important that you consult with a knowledgeable attorney when you prepare a Power of Attorney.
Your loved ones will have to petition the courts to have a guardian appointed on your behalf. This is a complex, costly and expensive process that can normally be avoided if you would have executed a good durable Power of Attorney.
In addition, with a guardianship, you are leaving the protection of the assets and income of the incapacitated person to the Court’s discretion. Many times, what you believed that your loved one would have wanted to do with his or her assets (such as gifting property to loved ones or charities) may not be carried out by the Court.
Thus, for a very small fraction of the cost of commencing and maintaining a guardianship proceeding, you would be smart to execute a well-prepared Power of Attorney so that your property management needs will be simplified should you lose capacity.
Is it true that once I execute a Power of Attorney and appoint my son as my agent, he can try and withdraw all my money covered by the Power of Attorney and buy Enron stock???
Well, I hate to say it, but yes he could.
There are different types of Powers of Attorney. The two most common are Durable Powers of Attorney, which become effective immediately upon execution. The other is a A “springing” Power of Attorney which becomes effective upon proof by a physician that you are unable to make decisions for yourself.
Normally, the Durable Power of Attorney works fine because you are appointing an agent that you know and trust who will not run off with your money (and certainly not your Enron stock). You and your agent(s) will put it in a safe place until there is a need for it, if at all.
However, if you do a “springing” Power of Attorney, the Agent you appoint will have to show the financial institution that he or she is dealing with on your behalf written proof from a licensed physician (not a witch doctor either) that you lack the physical and/or the mental capacity to attend to each and every property management need set forth in the Power of Attorney. This certainly gives you more protection against a scheming agent, but also can delay important property management decisions because normally the financial institution will be more concerned about whether the proof of incapacity that you are providing is accurate.
There is no correct Power of Attorney for everyone. It depends on your circumstances. Normally, when you have the chance to appoint a loved one in whom you have a great deal of trust, you do not need the “springing” power.