“Power of Attorney” is a term many people universally use to describe what are actually different documents and, more importantly, different powers. The main documents people refer to are a Health Care Power of Attorney and a Durable Power of Attorney. North Carolina Chapter 32A “Powers of Attorney” and 32C “North Carolina Uniform Power of Attorney Act” are the relevant state statutes for these items. Primarily, individuals are concerned with health care decisions and financial decisions.
What is a Health Care Power of Attorney?
A Health Care Power of Attorney is a document that you sign, witnesses sign, and is notarized, whereby you name an individual who, in the event of your incapacitation, will make various medical decisions on your behalf. This allows you to specify in advance health care decisions that must be followed.
When do I need a Health Care Power of Attorney?
If you are competent and able to communicate your decisions, you alone have the right to consent to medical treatment. If you are unable to communicate or are considered incompetent, then, without a health care power of attorney in place, North Carolina law determines who can consent to medical treatment on your behalf. N.C.G.S. Chapter 90-21.13 lists the order in which medical professionals determine who to ask for permission. If there is no health care power of attorney in place, the next individual medical professionals will turn to is the spouse. If no spouse exists, the statute continues to a majority of children over the age of 18, a majority of siblings over the age of 18, and finally, an individual who has an established relationship and is acting in good faith on behalf of the patient.
It quickly becomes clear that absent a Heath Care Power of Attorney there is a possibility for disagreements and, more importantly, that someone may make a decision you would not want them to make. For instance, what if you do not wish to receive artificial hydration and nutrition but your children cannot bring themselves to not have it administered? What if you have two children and they disagree on what you would want? How would a doctor determine who to listen to?
A Health Care Power of Attorney brings you peace of mind knowing you have selected the right individual to make decisions, if necessary, and that they will make the decisions you want them to make.
What is a Durable Power of Attorney?
A Power of Attorney is when an individual grants the right to someone else (an ‘agent’) to act on their behalf. A Durable Power of Attorney is one who survives (meaning the individual or “agent” can still act) the incapacitation of the person granting the power to act on their behalf. These documents can ‘spring,’ meaning they are only effective once incapacitation occurs.
When do I need a Durable Power of Attorney?
A Power of Attorney can be used for a single transaction (buying/selling a piece of property), a limited scope, or grant general powers used freely. We see two main uses for a Durable Power of Attorney. For instance, an individual will name an agent to assist them with their financial matters to relieve them from the burden of managing it themselves. This often occurs when someone is sick and chooses to focus on their health and is lucky enough to have a trusted individual who is willing to help them. This person is typically a spouse or child. The other common use of a Power of Attorney is when planning for the future, in the event you may become incapacitated. In this case, we would recommend a Springing Power of Attorney.
Unlike with medical decisions, there is no statute that directs someone by default to make financial decisions for you. For instance, if you suffer from dementia and can no longer make sound decisions, doctors may listen to a family member (as explained above). However, no financial institution can work with family members on your behalf. This can create an urgent financial situation or burden on your family. Absent a Power of Attorney, families are forced to apply to the court for Guardianship of the Estate. This is a timely endeavor and can be costly as well.
Thorough estate planning includes designating a Health Care Power of Attorney and Springing Power of Attorney, “just in case”. Estate planning is about bringing you peace of mind today by creating a roadmap for your family.
The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice, and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.