If you are concerned that an elderly parent is losing the capacity to properly manage their assets and care for themselves, there are two ways you can receive the legal authority to step in and handle their affairs. The preferable method is for your parent to voluntarily give you authorization with a durable power of attorney—a legally binding document that tells the court that your parent would like to appoint you as their agent by their own free will. As long as your parent is of a sound mind and is not subject to duress or undue influence, this will give you all the authority you need to handle their affairs.
Drafting a power of attorney is a relatively simple process:
- Start with an open conversation
- Draft the document with an attorney
- Have the power of attorney witnessed and notarized
- Submit copies to the appropriate financial and healthcare organizations
Start with an Open Conversation
Nobody likes to have their freedom taken away, and to many people, a power of attorney implies just that. Fortunately, that’s a misunderstanding that can be addressed. Explain to your parent that a power of attorney grants you permission to act on their behalf, but it does not take away their ability to handle their own affairs. It’s like adding an authorized user to their checking account or credit card—there are now two people who can access their accounts, pay their bills, access their medical records, and speak with their doctors. A power of attorney is meant to make things easier for them, not to take away their free will.
If your parent expresses resistance or reluctance (which is probably to be expected if this wasn’t their idea), be open and honest with them about your concerns. Rather than telling them you want blanket authorization to handle everything, try to address the areas that are of specific concern. For example, if they are behind on their bills or have accounts in collections, tell them you’d like to take care of paying the bills so they don’t have to worry about it. If they had a recent hospital stay, let them know you’d like to be able to speak with their doctors if that happens again—especially if an illness or accident rendered them unconscious or incapacitated. When your parent understands your intentions and sees the benefits, it’s a lot easier to get on the same page.
Draft the Document with an Attorney
A do-it-yourself power of attorney is perfectly legal, and in many cases it’s a perfectly acceptable solution. However, if your parent is expressing hesitation, if you have any doubts as to their mental capacity, or if you anticipate another family member may contest the power of attorney, it’s worth the extra cost to hire a lawyer. An experienced attorney can explain everything to your parent to put their mind at ease, and they can customize the legal document to include clauses that address your specific concerns.
For example, they can draft a power of attorney that grants authorization to all of your parent’s assets, but refrains from granting you permission to make medical decisions on their behalf if they want to retain control in that area. Alternatively, the document could grant you full access to their medical history and the ability to act as their healthcare proxy, but restricts access to only a handful of your parent’s financial accounts. If you have any concerns that someone may contest the power of attorney, an experienced attorney can also ensure that the document is properly prepared and protected from unwarranted contests.
Have the Document Properly Witnessed and Notarized
For a durable power of attorney to be valid, the principal (your parent) needs to be of sound mind, and cannot be subject to duress or undue influence. A witness will need to sign the document to attest that at the time of signing, the principal meets these criteria. It’s a good idea to choose a disinterested witness who would not benefit from the power of attorney being granted, in case anyone contests the power of attorney down the road. In the state of Arizona, you’ll also need to have the document notarized.
Distribute Copies to the Appropriate Financial and Healthcare Organizations
Once you have the power of attorney in hand, you’ll need to get a copy to the right organizations so that they will recognize your authority as the attorney-in-fact. Pay special attention to the following:
- Credit card companies
- Retirement account custodian
- Brokerage account custodians
- Life insurance companies
- Health insurance provider
- Healthcare professionals, including physicians, hospitals, and care facilities
That isn’t an all-inclusive list, so be sure to take an inventory of which organizations will need a copy of the document and ensure all of them are covered. Many institutions will require the power of attorney be submitted with one or more forms that will likely require the principal’s signature, so you’ll want to take care of this while the principal still possesses the capacity to do so.
Can Someone Take Away Your Power of Attorney?
There are several situations in which a power of attorney can be revoked. Common circumstances include:
- If the principal, of sound mind and of their free will, revokes the power of attorney
- If the principal was not of sound mind when the document was drafted
- If the principal was subject to elder abuse, fraud, manipulation, or undue influence
- If a judge finds the attorney-in-fact has abused their authority, or has failed in their fiduciary responsibility
What is the Alternative to a Power of Attorney?
If your parent is incapacitated and not of sound mind, or if a power of attorney is revoked by a judge and the principal is no longer of sound mind, the court can appoint a guardian to handle their affairs. Where a power of attorney is granted of free will, guardianship can be granted without the parent’s permission. As such, it’s a serious matter that requires due process, proof that the individual is incapacitated, and evidence that the party petitioning for guardianship is qualified to for the position.
Call Our Arizona Estate Team at (480)467-4325 to discuss your case today.