Monday, July 27, 2009

What's In the Durable POA?

We've been talking about the durable Power of Attorney, one of the most important documents that you'll need as a caregiver.

Different laws exist in each state regulating such documents so your parent’s attorney (at least an attorney in the state in which your parent resides) can draft a basic document. From experience I learned that there are some things that must be included:

1. The POA should be DURABLE. This means that it goes into effect when your parent is considered incapacitated, and your role will last until your parent’s death or until he regains competency. "Competency" has a legal definition in each state and criteria for passing control to you. For my mother, her personal physician and her attorney had to verify that she could not take care of her affairs.

2. The POA should include specific financial items. Every POA includes standard language that describes the types of finances for which you will be responsible. In addition, whether you know your parent’s financial holdings or not, be sure that every type of asset or investment is covered.
• Add wording for investments such as stocks, bonds, REITS and mutual funds. Without wording that gives you access, most investment houses and brokerage firms will not permit you to work with your parent’s investment accounts.
• Also insure that you have access to the safe deposit box (especially if your name is not on the box with your parents). Additionally, find the box keys and have them available. There are two keys for each box.

3. The POA should cover Health Care. States are adopting standard language for this. What you want is the right to admit your parent to a hospital (no, it’s not automatic) and to make decisions on all care. In this document can be included a statement of Advance Medical Directives (we'll get to this in a future post) although most health care facilities will also want the Medical Directives in a separate document to attach to your parent’s chart.

Even with specific wording in place, be prepared to obtain a notarized attorney’s statement for some brokerage houses and investment firms. If your parent is receiving Social Security checks and you‘ll handle that money, you will need to apply with the Social Security Administration to be the “designated payee”. But the DURABLE POA will smooth the path with these organizations and clearly state your parent’s intent in the matter.

Some Important Tips

  • Once you have the signed Durable POA, keep the original safe and make plenty of clean copies. You will need to file a copy of it with each organization when you are representing your parent.
  • Find a Notary Public near to your work or home. You may need to send notarized copies of the POA. The Notary will also be used for other documents as you manage your parent's affairs.
  • DO NOT give the original POA to any of the various organizations that will need a copy (such as banks, the hospital, etc.), even if they plead and threaten. Explain your limitations. Send a copy. A copy is acceptable if you are firm about it; suggest a notarized copy.

    I had only one original in my possession, signed with great emotion. In only one instance did I agree to hand over the original--to an investment firm who would not budge—but we agreed that I would send it registered mail with a return envelope to be mailed immediately back.

I'll finish next time with some final suggestions for the POA and talking with your parents about this important planning tool.

Until then, blessings on your caregiving day!

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