The Importance of Having both a Durable and Healthcare Power of Attorney

by Jerry Duane Clinch on Aug. 12, 2021

Other Power of Attorney Estate  Estate Planning 

Summary: An Article discussing Durable and Healthcare Power of Attorney documentation in Nebraska and their functions and benefits.

No one can argue that things have been a little crazy over the past year. As a result of the public health crisis that consumed our lives, many people are giving thought to preparing a trust or will, however, many people often overlook other very important components of a comprehensive estate plan: A Durable Power of Attorney and a Healthcare Power of Attorney. Below is a set of questions and answers that help explain the operation and utility of Durable and Healthcare Power of Attorneys.

What is a Durable Power of Attorney?

A Durable Power of Attorney is a legal document that allows another person, your “agent,” to act on your behalf with regard to your financial affairs. Put another way, it allows someone other than yourself to make decisions regarding your money and property, when the need arises or as you would otherwise allow. Your agent can even take care of your business in the event that you are not able to do so yourself. You are free to give your Power of Attorney as much, or as little, power as you would like.The Durable Power of Attorney allows you to choose which particular powers you give to your agent and which you do not. In the event you become sick or otherwise incapacitated and cannot handle your financial affairs, your agent can handle them for you.

What is a Heathcare Power of Attorney?

A Healthcare Power of Attorney, also known as Advanced Directives, is a legal document that allows you to select an individual, or number of individuals, who are able to make medical decisions on your behalf, when you are unable to do so yourself. To be clear, appointing someone to act as your Healthcare Power of Attorney does not give them the ability to make all medical decisions for you from the point of signing forward; it is only effective when you are unable to express your wishes that your agent would step in and make any necessary medical decisions. It is very important to let your Healthcare Agent know your medical preferences to avoid any possible confusion down the road.

Who should I pick as my agent?

People generally choose their spouse or a trusted family member or friend. You may choose whomever you desire, and you don't have to use the same agent for both your Durable and your Healthcare Power of Attorney. You may also choose successors to step in if your current agent is unavailable. You may also pick more than one person to act at one time; however, you must decide whether they need to act together or separately, and this can cause unnecessary complications when multiple people are required in order to take action. 

Why is having both a Durable and a Healthcare Power of Attorney important?

If your Power of Attorney is “Durable,” it will allow your agent to handle your affairs in the event you are no longer able to do so due to accident, illness, or other cause. Without a Durable Power of Attorney, someone would need to be appointed as a Guardian and/or Conservator of your property by a court, which can be a complex and expensive process.

With a Healthcare Power of Attorney, your agent is given the authority to make medical decisions on your behalf when you can't do so yourself. It is always important to discuss your medical wishes with your agent so that he or she is able to make the most informed decisions possible.

If you don't have a Durable and/or Healthcare Power of Attorney and you become incapacitated and unable to make decisions yourself, Court proceedings are going to be required to set up a Guardianship and/or Conservatorship to allow someone to make financial and/or medical decisions on your behalf. This can be a costly and time-consuming process, and so long as a Guardianship/Conservatorship is in effect, your Guardian/Conservator will have to prepare and submit annual paperwork with the Court to show how your finances are being managed and to update the Court on your condition. This paperwork is potentially going to be required for the rest of your life, and if an attorney is used to prepare the paperwork, that is another fair amount of money that has to be expended each year. With the proper paperwork in place, this costly court process can be avoided.

Do I have to be incapacitated in order for my Power of Attorney to make decisions for me?

As far as your Healthcare Power of Attorney is concerned, yes, your incapacity would be required.

With a Durable Power of Attorney, the document can be set up to take effect immediately upon your signature, meaning your agent is free to act on your behalf concerning your financial decisions as soon as the paperwork is signed. An alternative to this is that the Durable Power of Attorney doesn't come into effect until you are deemed incapacitated, which may require additional paperwork from your physician to demonstrate that you are, indeed, incapacitated. This is called a “springing” Durable Power of Attorney as it “springs” into effect upon your verified incapacity.

Can I revoke my Power of Attorney?

Yes, both Durable and Healthcare Power of Attorneys are revocable at any time, so long as you have the necessary mental capacity to revoke the Power of Attorney. You should make sure to inform any financial entity or healthcare provider for which you have given notice of your Durable or Healthcare Power of Attorney any time you revoke or update your Power of Attorney documentation because a financial institution or healthcare provider may still honor your Power of Attorney if they haven't received proper notice of its revocation.

Does my agent have to sign the Power of Attorney?

No. All that is necessary in Nebraska for your Power of Attorney paperwork to take effect is for you to sign, under the right circumstances and with the necessary mental capacity.

What if I don't have a Durable or Healthcare Power of Attorney?

If you don't have a Durable Power of Attorney and/or a Healthcare Power of Attorney, contact Clinch Law Firm, LLC today for an appointment to discuss the preparation of these important documents, providing you and your loved ones with Peace of Mind.

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