So, you'll have to stay with me on this one. If you're part of my generation, you probably remember watching the Masters of the Universe growing up. The hero of the series was Prince Adam, who could transform into He-Man by holding up his sword and proclaiming "By the power of Greyskull . . . I have the power." It didn't actually look like much of a transformation; Adam and He-Man looked identical except that Adam wore more clothing. But, somehow, when Adam became He-Man, he was endowed incredible power which allowed battle Skeletor and his minions in a way that Prince Adam never could. He now had the power!
There are a couple of simple estate-planning documents that, though they seem rather benign, can give you the power to either do tremendous good for someone or wreak utter havoc on their estate. These documents are the medical power of attorney and the statutory durable power of attorney.
The medical power of attorney gives an agent the power to make medical decisions for someone when he or she can no longer make those decisions for him or herself. Similarly, the statutory durable power of attorney gives an agent the power to control someone's property -- including real property, personal property, and financial assets. The statutory power of attorney can either take effect when the principal (the one who signs the power of attorney) becomes incapacitated, or it can take effect immediately.
What sort of decisions would someone make under a medical power of attorney?
Your agent may consent to surgery, treatment, therapy, or medication for you if you are unable to do so yourself. Likewise, your agent may refuse to consent to a recommended course of treatment if he or she believes you would have refused.
What information can the agent review?
The agent has the right to review your medical records before making a decision and has the right to seek a second opinion before making a decision. Basically, the agent steps in the principal's shoes and has all rights and powers that the principal would have.
When would I want a statutory power of attorney to take effect before I was incapacitated?
If you know you will be travelling but want someone to have power to take care of your property, you may want to have a power of attorney that's effective immediately so that your agent can take care of your property while you are out of town.
Is there any recourse against a "rogue" agent?
Yes. Your agent owes you a fiduciary duty, and, if he or she does something that is against your interest, you may be able to sue them for damages. Of course, rogue agents tend to spend the money that they steal, so you might not be able to get much back from them. That's why it's very important to appoint an agent who will be loyal to you (see my previous post).
What happens to my statutory power of attorney when I die?
It immediately terminates. Don't rely on a statutory power of attorney to allow someone to handle your estate. That's why you need a will.
What if I appoint my spouse as my agent and later divorce my spouse?
Under either power of attorney, a divorce terminates the appointment of the former spouse. If you want your former spouse to serve as your agent, you'll need to sign a new power of attorney.