A Guide to Power of Attorney for Elderly Parents

A power of attorney (POA) is an important element of planning for your elderly parent’s future. It allows another person to take action on your parent’s behalf, ensuring bills get paid and medical decisions are made in the unfortunate circumstance that your elderly parent is unable to do those things on their own. Christina Jeter, Esq., of The Jeter Law Firm, PLLC, advises, “It always makes sense to have a power of attorney in place, regardless of any situation. It is better to be prepared than to have to scramble to think of what an elderly parent would really want.”

With a power of attorney in place, you can be confident that you’re prepared and your parent’s wishes will be respected when they need help.

A power of attorney is a document that allows someone to act on another person’s behalf. The person allowing someone to manage their affairs is known as the principal, while the person acting on their behalf is the agent. POAs are generally governed by state law, and there may be some differences between states. Generally, these differences are minor, but it’s always a good idea to talk to an attorney who understands the laws specific to your state.

When considering a power of attorney, there are a few other important factors to keep in mind:

Different types of POAs can also give the agent different powers, so it’s important to research the type of POA you need. The different types are:

As your parents get older, it makes sense to be prepared for any challenging situations that may require your help. A POA allows children, or another agent, to step in when the need arises. Jeter states, “Any person with an elderly parent should have the conversation with their parent about getting a power of attorney in place if one does not already exist. In my practice, I advise people not to wait when it comes to getting a power of attorney because there are just too many things that can come up in life.”

• Financial Difficulties: A financial POA allows you to pay the bills and manage the finances for parents who are having difficulty staying on top of their financial obligations.
• Chronic Illness: Parents with a chronic illness can arrange a POA that allows you to manage their affairs while they focus on their health. A POA can be used for terminal or non-terminal illnesses. For example, a limited POA can be set up to take effect when a person begins chemotherapy and then be revoked once the cancer is in remission.
• Memory Impairment: Children can manage the affairs of parents who are diagnosed with Alzheimer’s disease or a similar type of dementia, as long as the POA is durable (so it continues once the parent becomes incapacitated) and the paperwork is signed while the parent still has their faculties.
• Upcoming Surgery: With a medical POA, you can make medical decisions for the principal while they’re under anesthesia or recovering from surgery. A financial POA can also be used to ensure financial affairs are managed while they’re in recovery.
• Regular Travel: Older adults who travel regularly or spend winters in warmer climates can use a limited financial POA to ensure financial obligations in their home state are managed for the specific period of time that they are absent.

There are many reasons why a POA is useful for older adults and their families, but they’re not without downsides. Two common issues to keep in mind include:

• Elderly Exploitation: A POA gives someone control over your parent’s affairs, which can leave them open to abuse or financial exploitation. If an agent acts in bad faith, it can be impossible to undo their actions. While your parent can revoke a POA at any time, as long as they are not incapacitated, you should always appoint someone your parent trusts to act as their agent.
• Family Disagreements: Appointing a power of attorney can cause problems within families. Disagreements may arise over who should be appointed as the agent and when there seems to be any misalignment between the agent’s decisions and the POA document. To help avoid these problems, parents should talk to family members about their wishes and why they chose their power of attorney.

When considering individuals to act as a power of attorney, keep the following requirements and recommendations in mind:

• Powers of attorneys must be at least 18 years old and of sound mind.
• Some states do not allow the agent for a medical POA to be your parent’s doctor or another health care provider.
• More than one person can be appointed as a power of attorney, if desired.
• Many seniors choose an adult child, spouse, close friend or other family member to serve in this role.
• A power of attorney must be someone that can be trusted to honor the principal’s wishes and make decisions based on their benefit – not their own
• Appointing someone outside of your parent’s inner circle may avoid conflict and promote objectivity.

Choosing someone to act as a power of attorney is a critical decision. The agent can act on behalf of your parent, so it must be someone your parent trusts and is comfortable with. It should also be someone willing to discuss options and listen to your parent’s wishes and desires.

There is no reason why a power of attorney must be related to the principal. Instead of a family member, you may want to consider choosing one of the following individuals:

• A family friend or another trusted community member
• A professional accountant, lawyer, or other employee at a bank or trust company

In fact, a non-relative may be a better choice for several reasons, including the following:

• An older adult’s family may live far away or in another state
• Children may have trouble acting objectively when handling their parent’s affairs.
• If children are too involved, POAs may be ruled invalid, leading to costly legal battles and attorneys’ fees
• Professionals may have relevant expertise that the family does not, such as an accountant named as the agent in a financial POA

When making your decision, keep in mind that professionals are likely to charge fees, which can add up quickly.

Make sure you know what assistance your parent requires and that your parent’s wishes are clearly stated in the POA.

• Understand how much work is currently required to meet your parent’s needs and if that’s expected to change in the future.
• Keep in mind that some tasks are more time-consuming than others. Paying monthly bills typically takes less time than making decisions about nursing homes.
• Ensure your parent’s wishes are stated clearly in the POA document.
• An unclear POA may leave room for interpretation and representatives may have difficulty knowing what would be the best decision.

A power of attorney does not become personally liable for any of the principal’s debts or bills. However, you should take the following steps to avoid violating any POA clauses that can open you up to legal or financial liability:

• Keep your finances separate from the principal’s finances
• Always make decisions that benefit the principal
• Before signing to be a power of attorney, consider reviewing the agreement with a lawyer to make sure you fully understand each clause
• Keep good records and be prepared to explain how your decisions abide by the principal’s wishes

It’s important to understand the basics of a power of attorney before you set one up. Many states have elder law specialists that can give free or low-cost advice to seniors. These lawyers have experience arranging power of attorney documents and understand local laws. Contact your local Area Agency on Aging for assistance finding a nearby specialist.

When you’re ready to set up the POA, follow these steps:

• Talk to Your Parents: Discuss what they need in a POA and what their wishes are when it comes to their finances and health care. Ensure your parents fully understand the agreement and what it means for their lives. You must also confirm their consent and make sure they agree with everything discussed.
• Talk to a Lawyer: Everyone who gets a POA has different needs and the laws are different in each state. It’s important to get legal advice so that your parent’s wishes are taken into consideration and the document is legal.
• Create the Necessary Documentation: Write down all the clauses you need that detail how the agent can act on the principal’s behalf. This ensures your parent’s wishes are known and will be respected. Although you can find POA templates on the internet, they are generic forms that may not stand up to legal scrutiny and probably won’t have all the clauses you require.
• Execute the Agreement: Sign and notarize the document. Requirements for notarization and witnesses differ between states, but it’s always a good idea to notarize the document to ensure its validity throughout the country.

There are a variety of reasons why someone might want to revoke or override a power of attorney, but only the following entities have the ability to do so:

• The principal passes away
• The POA is not durable and the principal becomes incapacitated
• The agent passes away, becomes incapacitated, or resigns
• The principal revokes the POA
• The POA sets an expiration date and that date has passed
• The POA’s pre-determined purpose is complete (for example, signing documents for a specific transaction)

Each state has durable power of attorney laws that outline how individuals can control their health care decisions in the event of their incapacitation through legally appointing another trusted individual to act on their behalf. View your state’s durable power of attorney laws by selecting a state on the map below.

• “Powers of Attorney.” Texas State Law Library. https://guides.sll.texas.gov/powers-of-attorney Accessed 22 June 2021
• Texas RioGrande Legal Aid. “Powers of Attorney – Fact Sheet” Texas Law Help. https://texaslawhelp.org/article/powers-attorney-fact-sheet Accessed 22 June 2021
• “Help for agents under a power of attorney.” Consumer Financial Protection Bureau, May 2019. https://files.consumerfinance.gov/f/documents/cfpb_msem_power-of-attorney_guide.pdf Accessed 22 June 2021
• Singleton, Amanda. “Powers of Attorney: Crucial Documents for Caregivers”. AARP, October 31, 2019. https://www.aarp.org/caregiving/financial-legal/info-2019/types-of-power-of-attorney.html Accessed June 22, 2021
• “Limited Power of Attorney”. Legal Information Institute, Cornell Law School. https://www.law.cornell.edu/wex/limited_power_of_attorney Accessed June 22, 2021
• “Springing Durable Power of Attorney.” Legal Information Institute, Cornell Law School. https://www.law.cornell.edu/wex/springing_durable_power_of_attorney Accessed June 22, 2021
• “Giving Someone a Power of Attorney for Your Healthcare (multi-state guide and form.” American Bar Association, August 25, 2020. https://www.americanbar.org/groups/law_aging/resources/health_care_decision_making/power_atty_guide_and_form_2011/ Accessed June 22, 2021
• “Managing someone else’s money.” Consumer Finance and Protection Bureau. https://www.consumerfinance.gov/consumer-tools/managing-someone-elses-money/