Whether you are currently paying for a loved one’s monthly senior living payments, or you plan on doing so one day in the future, you are likely to encounter the legal concept of power of attorney. A power of attorney is a legal document that gives someone else the authority to act on another person’s behalf. The person who creates the power of attorney is called the "principal," and the person they choose to act on their behalf is called the "agent" or "attorney-in-fact." Power of attorney is an important tool that allows individuals to ensure that their affairs are managed according to their wishes, by a trusted individual or loved one, in the event that they are unable to do some themselves.

While you should always consult a legal professional before signing any documents, particularly those as important as a power of attorney, the below guide should give you all the most important details on what a power of attorney is, and why it can be so important for individuals in senior living and their families.

Why do I need power of attorney? 

If you have a loved one who needs you to make decisions on their behalf, you’ve probably heard of power of attorney. Whether you’re required to have power of attorney to make medical decisions, pay their bills, or carry out any other of a loved one’s affairs, it’s beneficial to know exactly what power of attorney is, the different types of power of attorney, and all the things that a grant of power of attorney allow you to do. Some reasons that an individual may require a power of attorney include: 

In the event of incapacitation: If an individual becomes incapacitated or otherwise unable to make decisions for themselves due to illness or injury, a power of attorney can allow someone else to step in and make decisions on their behalf. 

To manage financial affairs: If an individual is unable to manage their own financial affairs due to physical or cognitive impairments, a power of attorney can allow someone else to handle tasks such as paying bills, managing investments, and conducting business on their behalf. 

To make healthcare decisions: If an individual is unable to make informed decisions about their own healthcare due to illness or injury, a healthcare power of attorney can allow someone else to make medical decisions on their behalf. 

For peace of mind: By creating a power of attorney, individuals can have peace of mind knowing that their affairs will be managed according to their wishes, even if they are unable to do so themselves. This can provide reassurance for both the individual and their loved ones.

What are the types of power of attorney? 

There are several types of power of attorney, each with its own specific purpose and use cases. One common type of power of attorney is the durable power of attorney, which allows the agent to make financial decisions on the principal's behalf if the principal becomes incapacitated or otherwise unable to make decisions for themselves. This can be particularly important for older individuals who may be at risk of developing cognitive impairments or for individuals who may be unable to manage their own affairs due to illness or injury. 

Durable power of attorney

A durable power of attorney can be particularly useful for individuals who are assisting an older loved one, particularly if they are living in a senior living community. A durable power of attorney remains valid throughout an individual’s lifetime, and continues in operation even if they have become incapacitated. This form of power of attorney may be appropriate if an older adult is unable to manage their own financial affairs, as their loved one can be given the power to step in to pay the bills and manage the finances. This can help to ensure that their loved one is able to receive the care they need and that their financial affairs are in order. The durable power of attorney grants an individual the ability to make decisions that would be honor their loved one’s wishes and best interests.   

Healthcare power of attorney

Another type of power of attorney is the healthcare power of attorney (also known as a medical power of attorney or healthcare proxy). This type of power of attorney allows an individual to appoint someone else to specifically make healthcare decisions on their behalf if they are unable to do so themselves. This can be important for individuals who are at risk of becoming incapacitated or for those who may be unable to make informed decisions about their own healthcare due to illness or injury.

The healthcare power of attorney is typically used in conjunction with a living will, which is a document that outlines the individual's wishes for their healthcare in the event that they are unable to make decisions for themselves. 

General Power of Attorney

Like a durable power of attorney, a general power of attorney is a legal document that gives someone else the authority to handle a wide range of financial and legal matters on behalf of another individual, but unlike a durable power of attorney it ceases to be in operation if the individual becomes incapacitated. A general power of attorney grants authority to make decisions about an individual’s financial and legal affairs, including paying bills, managing investments, and conducting business on their behalf. Oftentimes, people will create time-delineated general powers of attorney. For example, an individual might create a general power of attorney to allow their agent to handle their affairs while they are out of the country for an extended period of time. 

Limited Power of Attorney 

Unlike a general power of attorney, which allows the agent to handle a wide range of financial and legal matters, a limited power of attorney is limited to specific tasks or decisions. A limited power of attorney is often used for one-time transactions or for a specific purpose.

For example, an individual might create a limited power of attorney to allow their agent to sell a specific piece of property on their behalf, or to sign legal documents on their behalf while they are unable to do so themselves. 

‍Springing Power of Attorney ‍

A springing power of attorney is a legal document that takes effect only under specific circumstances, such as if an individual becomes incapacitated. This generally means that the person  named in the document does not have the authority to act on the individual's behalf until after the specified event occurs. A springing power of attorney is often used as an alternative to a durable power of attorney, which is effective immediately and remains in effect even if the principal becomes incapacitated. The advantage of a springing power of attorney is that it allows the principal to retain control over their affairs until they are no longer able to do so themselves. 

Understanding Power of Attorney 

Because it's so important for you and your loved one to understand the laws in your state, you should consult an attorney to ensure that your power of attorney is properly drafted and meets all necessary legal requirements. In order to create most forms of power of attorney, the individual must be of sound mind and able to understand the implications of the document. They should carefully consider their choices for an agent and make sure to choose someone they trust and who is familiar with their wishes and values. It's also a good idea for the individual to discuss their wishes and expectations with their chosen agent to ensure that they are on the same page. It's also important to note that power of attorney is only valid while the principal is alive. Upon the principal's death, the power of attorney becomes void and their estate is typically managed by a representative appointed through their will or through the probate process.

To learn more about how Sunbound can help make senior living more affordable for you or your loved one, send us an email at info@sunboundhomes.com or request more information on Sunbound. Sunbound is the best way to pay for senior living and is on a mission to make senior living affordable for everyone.