A guide to power of attorney and statement of wishes
As a parent or relative ages, it can be a real struggle to balance respect for their independence with protecting them and ensuring they’re kept safe if they have, or develop, significant mental or physical health problems. A power of attorney, along with a statement of wishes, is one way to make sure that no matter what happens down the road, their wishes can be prioritised if they aren’t in a position to make decisions themselves.
This article gives an overview of what these documents are, the different types that exist, some common reasons for needing to put them in place, and how to do it.
Note: In this article, we refer to the person giving the power of attorney as the “donor”.
What is a power of attorney?
A power of attorney (POA) is a legal document, signed by a competent adult (someone who is mentally fit to sign) that grants a trusted individual the power to make decisions on their behalf if they can’t make them.
What is a statement of wishes?
A statement of wishes is not legally binding, but it can accompany a POA (or a will) to provide genuine insight into what the person would want – offering important guidance for those involved in any decision-making.
There is no limit on what can be included; it can be anything that is important to the person in question and that they would want others to know, however big or small. There is no particular template for a statement of wishes, it can be informal and even handwritten. It doesn’t have to be dated, signed or witnessed, but signing it can help to prove that it is the views of the person and dating it shows that these were their wishes at that date. Having an independent person witness the signature can also help to confirm things.
What types of Power of Attorney are there?
This depends on the country you are in as every country has its own laws. Most English-speaking countries have their own POA forms, so power of attorney made under the laws of one country is unlikely to be recognised in another. The best advice is to make a POA in each country where you have property of any value or where you regularly spend time. Be aware that not all countries’ laws allow for the use of a power of attorney, so check with a lawyer in the country concerned if you think you need to be covered there.
There are two basic areas of legal rights that a power of attorney will address:
finance and property
personal care and welfare
There are a number of ways that you can set up a POA to meet different needs:
1. General power of attorney (sometimes called a ‘financial power of attorney’).
A general power of attorney is the most comprehensive as it gives a person the power to act on someone else’s behalf both financially and legally. General power of attorney can also be used for healthy parents who want help with financial or personal matters.
This type of POA gives a person the power to:
Sign documents on the donor’s behalf
Open or close bank accounts, and withdraw funds
Buy and sell property and other assets
Trade and sell stock
Pay bills and cash cheques on the donor’s behalf
Enter contracts for utilities and services like housekeeping or home healthcare
2. Medical power of attorney (also known as a ‘healthcare proxy’)
A medical power of attorney is giving responsibility to someone to make healthcare decisions for a person if they’re incapacitated. It’s the job of that nominated individual to make sure that the donor’s wishes (as stated in their advanced directive, statement of wishes, or living will) are upheld. A medical POA only comes into effect when the donor is deemed incapacitated. The individual named in the POA is responsible for making sure health providers follow instructions from the medical power of attorney documents.
The nominated individual also has authority over:
Medical treatment
Surgical procedures
Feeding tubes and artificial hydration
Organ donation
Selection of healthcare or assisted living facilities
Release of medical records
3. Enduring power of attorney (or ‘durable power of attorney’)
An enduring POA allows someone to make financial and medical decisions through all mental and physical circumstances, unless the donor chooses to revoke that power. If the donor is in a coma, has experienced significant cognitive decline from dementia, or is otherwise deemed incapacitated, an enduring POA allows the nominated person to make decisions on their behalf. A non-enduring power of attorney is void if the donor becomes mentally incapacitated, so it’s not recommended for dementia patients or elders at risk of dementia.
4. Limited (special) power of attorney
A limited POA is exactly as it sounds – a person can give someone agency for a limited amount of time, which is generally stipulated in the document. For instance, a limited POA could go into effect for a specific business transaction, like a real estate sale.
5. Springing power of attorney
A springing power of attorney is a term used in North America for a POA that is executed in advance but doesn’t go into effect until the donor receives a formal declaration of incapacity. For those who want to keep autonomy as long as possible, a springing power of attorney can be preferable. However, it can lead to complications as medical evaluations related to determining competence can be costly, time-consuming, and subject to legal conflicts.
Why put power of attorney and statement of wishes in place?
1. Financial responsibilities not being managed
If your parent is having a hard time staying on top of their financial obligations, or is in danger of overspending their savings, it might be time to establish a financial power of attorney. Red flags are overdue bills, duplicate payments, or responding to fraudulent requests for money.
2. Alzheimer’s
It’s important to set up an enduring POA for someone diagnosed with dementia. It’s also important to create a statement of wishes before they experience significant cognitive decline, so that what matters most to them can still guide decisions about their welfare later on.
3. Upcoming surgery
Invasive surgeries can lead to complications. A POA and statement of wishes can make sure that a person’s wishes will be respected in case of emergency. At very emotional and stressful decision points, where family members may have differing views, having clarity about what the donor would want to have happen is really important.
4. Planned travel
Sometimes, a POA is established out of convenience, rather than necessity. If elders are travelling, they may want someone at home able to handle their bills.
5. Medical diagnosis
A person with a terminal diagnosis may want to establish a POA and statement of wishes to make sure their wishes are met when they become incapacitated or too sick to make healthcare decisions.
6. Unstable family relationships
Sadly, it’s really common for adult children to fight about a parent’s care, especially if they disagree about finances or end-of-life decisions. A statement of wishes can set out clearly what the parent would want to happen. And a POA clearly designates who’s responsible for upholding the parent’s wishes, and can prevent ill-intentioned family members from intervening.
How to select the right person to be a power of attorney for an elderly relative
Here are five questions to consider when selecting who should hold power of attorney:
1. Is a family member actually the best choice?
Many people select a relative as POA by default. But this can end up causing conflict if family relationships are strained. An advisor, close friend, or professional proxy can all be safe alternatives.
2. Is there a knowledgeable option?
Someone familiar with medical procedures and treatments may be able to make better decisions as medical power of attorney; someone with experience in accounting would be an ideal financial or general power of attorney.
3. Should power of attorney be split?
You can choose one person for general power of attorney and another for medical power of attorney. Or you can have more than one person for both. Two people can offer a more measured decision and support each other through making decisions. However, if there are two people who disagree, decisions could be delayed.
4. Will the person be able to carry out their parent’s wishes?
The top responsibility of a POA is to comply with the donor’s directives. Sometimes, this is really difficult emotionally. For example, a spouse may struggle with making the decision to end life support, even if it’s what their partner has specified that they want.
5. Who does the person trust?
The person designated as having POA should always put the needs and well-being of the donor first, no matter their own circumstances. Trust is imperative.
Sometimes, adult children can feel hurt or jealous knowing their parent has given a sibling POA. A family meeting can be a way to discuss choices and help people begin to accept them.
When and how should someone set up a power of attorney?
Experts recommend setting up a POA for an elderly parent before they need it – especially if they’ve received a diagnosis such as early-stage dementia. It’s a step to take sooner rather than later for anyone who is moving towards being cared for, even if the person involved is currently physically and mentally healthy. Setting up a POA is pretty straightforward and it can help avoid major headaches in the future.
There are many ‘do-it-yourself’ power of attorney forms available online. It’s probably a good idea to have a lawyer review what you have developed to help finalise it. Or, you can work with a lawyer from the start to help draft a document that is tailored to your family’s needs. There are many issues to consider and an experienced lawyer can help you work through those.
