What is a power of Attorney and Who Needs One?
A Power of Attorney (POA) is one type of legal tool called an advance directive. There are other types of advance directives, such as “living wills”, “advance health care directives”, and a “Do Not Resuscitate Order.” The information here is for the Power of Attorney directive, and does not apply to the other types of advance directives.
What is a Power of Attorney?
A Power of Attorney is a legal document in which one person can authorize or name another person to act on his or her behalf. For example, if John wanted Sam to have the legal authority to sell his car while John’s at fish camp, he might complete a power of attorney form allowing Sam to do this.
The person giving the authority is called the “principal.” In the example above, John is the principal. The principal must be 18 years old and have the mental capacity to grant authority to an agent. For instance, if John has dementia and doesn’t remember that he owns a car, it’s too late for him to appoint an agent. Also, the Power of Attorney is not valid unless the principal signs the POA form in front of a notary. If the principal is mentally competent but unable to sign his or her name, she can sign with an “X” or direct another person to sign on her behalf. But again, this must be done in front of a notary.
The person named to act on behalf of the principal is called the “agent.” In the example above, Sam is the agent. Because the agent will be acting on your behalf, it is important to discuss your wishes and desires with the person you name to make sure the agent understands what your wishes are.
An agent must be 18 years of age or older, but can generally be anyone the principal chooses -- a friend, relative, or someone else he or she trusts. There is an exception: a “public home care provider” who is providing services to the principal cannot be the only or the primary agent for that principal. Public home care providers include owners or employees of an assisted living home that receives state funding, personal care attendants, home health care providers, respite care providers, and many others who receive state funding, whether directly or through contracts or grants. In our example, if Sam works for a personal care service that is paid through Medicaid and John is one of his clients, Sam cannot be John’s agent. The legal restrictions on public home care providers being an agent can be found in Alaska statute 13.26.358; the definition of a public home care provider can be found in Alaska statute 47.05.017.
Who needs a POA?
So, who should have a POA? The answer – everyone! It’s not just for folks who are sick or old. Let’s face it, there’s no way to predict what life has in store for you. If you were unable to handle your own affairs because of an illness, accident, or even absence, who would you want to step into your shoes? And remember, once you’re unconscious or become incapacitated, you cannot complete the POA form.
But if you have a POA in place, a person of your own choosing – your agent – has the power to step into your shoes and handle your affairs as you would handle them yourself. And, they can do this without any involvement from the court system. It avoids having to file a guardianship case in court, which can be time consuming, stressful, and expensive. Plus, with a POA, you’ve chosen the person you trust to step into your shoes, instead of leaving this to a judge.
Giving someone a Power of Attorney, does NOT mean you are giving up your own rights to control your money and property. In our example above, where John has given Sam his POA to sell John’s car, John can still do this himself; but Sam can also do this.
A final note on choosing your agent – trust is critical
There’s one thing that can’t be emphasized enough. When you create a Power of Attorney, you are authorizing another person to act on your behalf. It is very important that you trust your agent to always act on your behalf and in your interest. This is especially true if you’ve given your agent access to your finances. There will be no oversight of your agent by a judge regarding the decisions he or she makes. If you cannot trust your agent to always act on your behalf, that person should not be your agent.