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An Overview of Powers of Attorney and Advance Directives (a/k/a, Medical Powers of Attorney)

by: Bradley R. Coppedge, Esq.

Any “basic” estate plan will (or should!) include a Last Will and Testament, along with a Power of Attorney, and an Advance Directive for Healthcare.  Let’s look briefly at these latter two ancillary documents, which allow you to designate who makes decisions for you if you become unable to act or speak for yourself.

A. Financial Power of Attorney

A Power of Attorney, also known as a Financial Power of Attorney, General Power of Attorney or Durable Power of Attorney, is an instrument by which you authorize another person or persons to act on your behalf. This person is known as your “agent” or your “attorney in fact.” This document allows your agent to make financial decisions on your behalf should you become incapacitated, without the need to have the Probate Court appoint a guardian or conservator, which is a time-consuming and expensive process. A Power of Attorney (“POA”) specifically grants your agent the power to handle all financial matters on your behalf.

A Power of Attorney is valid only during your life. It always terminates immediately upon your death, and is of no further benefit. It will also terminate upon your express revocation of the POA. The most effective way to terminate a POA is by delivering written notice to the agent you named, stating that you revoke the POA. Ideally, this statement should also be witnessed and notarized. You may also record a Revocation with the Clerk of Superior Court in your county of residence. The key issue is notice both to your agent, as well as to third parties. Where you revoke a POA, the most prudent course of action would be to deliver a Revocation to your former agent and any banks or other institutions or businesses your agent may have dealt with on your behalf, as well as record a written Revocation.

The POA is a wonderful tool in the hands of a trusted agent, but can cause much heartache if it is given too freely. To whom, then, should this broad power be given? This choice of agent demands careful consideration. It is generally recommended that the power be given to your spouse, if married; if you are unmarried, you should consider a child or one of your siblings. In any event, it should be someone whom you trust completely and who is aware of your financial resources, as well as any estate or gifting program which you may have in place. Furthermore, in addition to naming the “primary” agent, you should name at least one individual to serve as an alternate in the event the primary agent is unable to serve due to the subsequent death or disability of that individual.
Keep in mind that some duties are not delegable under a Power of Attorney, and are instead personal to the holder or the office the holder occupies.  By way of example, and Executor of an estate or Trustee of a trust may not delegate his or her power to act in such capacity under a Power of Attorney.

Additionally, for those who own property in multiple states, and wish to have a POA utilized for a sale or transfer of such property, it is important to make sure that the document meets the execution requirements of both states to be able to be recorded.  A POA used for real estate must meet the same execution requirements as a deed.   By way of example, in Georgia, a deed requires a witness and a notary. In Alabama, a deed requires only a notary.  Thus, a typical Alabama POA which has only a notary signature is insufficient to convey real estate in Georgia.

B. Medical Power of Attorney

In most states, including Georgia and Alabama, there are two legal documents that protect your right to refuse medical treatment, or to request specific medical treatment, in the event you lose the ability to make decisions for yourself.  These documents include the  Advance Directive for Health Care  (“Advance Directive” or “Durable Power of Attorney for Healthcare”) and a Living Will.  In many states, including Georgia and Alabama, these documents have been combined into one form that is now simply called an Advance Directive for Health Care (“ADHC”).  A separate stand-alone Living Will is still permissible, but is generally not necessary.

Just as with the regular POA, your agent under an ADHC is a person whom you appoint to make decisions about your medical care if you become unable to make those decisions yourself.  This agent is often a family member or close friend whom you trust to make these serious decisions.  The person you name as your agent should clearly understand your medical wishes and be willing to accept the responsibility of making potential life and death medical decisions for you.  As with a regular POA, you can and should also appoint a successor agent should your primary agent become unable to act.  An ADHC does not revoke or limit your right to make your own health care decisions, and as long as you are able to express your own wishes, your wishes will control.

It is important to note that if you subsequently marry after completing an ADHC in which your spouse is not named as agent, your marriage automatically revokes the power of your agent, unless your ADHC specifically provides otherwise.

A Living Will is also a health care document similar to the ADHC.  The difference between the two documents is relatively subtle.  Most attorneys generally view a Living Will as an individual’s “last requests” regarding medical care.  It does not appoint an agent.  The ADHC, on the other hand, is a document which can be used by your agent at any time throughout your life when you are unable to make medical decisions for yourself, such as when you are in a coma, under anesthesia during surgery, or any other time you are unable to speak or act for yourself.

(A Living Will should not be confused with the term Living Trust.  A Living Trust, often called a Revocable Trust, is an estate planning document that is intended to largely be a substitute document for a Last Will and Testament).

C. Costs

While software or even internet forms are available for a Power of Attorney and Advance Directive, it is generally advisable to have these documents professionally prepared. The costs will vary based upon any specific provisions that may be included, as well as the attorney you choose, but the costs of a professionally drafted POA and Advance Directive often range from $150 – $300 for one document, and  $300 – $600 for both, depending upon complexity and the expertise and experience of the attorney.