I frequently get asked about Power of Attorney (POA) forms, what they are, how they are used, and who should use them. I previously wrote about this topic in this post. So let’s start with some basics…
What is a North Carolina Power of Attorney?
In simple terms, a power of attorney is defined as a legal document that gives the “power of attorney” to another person. But what does that really mean?
It means that when you execute a power of attorney, you are giving somebody else the legal authority to act on your behalf with regards to certain legal, financial, or health-related matters.
As you can imagine, this is quite an awesome power to give to someone and is not to be taken lightly.
But within the confines of preparing a comprehensive estate plan, not all power of attorneys are created the same. In North Carolina, as is the case in many states, we have several different power of attorney documents that we use for estate planning purposes.
The two most commonly used power of attorney forms are the durable power of attorney and the health care power of attorney. Although not technically a power of attorney, we will also discuss a living will because it is closely aligns with these other documents.
The North Carolina Durable Power of Attorney
The durable power of attorney (DPOA) is an extremely important estate planning tool that is often overlooked. A durable power of attorney will appoint an agent to act on your behalf during a period of your incapacity.
For example, let’s say you get in a car wreck and fall into a coma for several weeks or even longer. Without a durable power of attorney, your family may not be able to access your bank accounts or pay your bills.
A DPOA will give your agent the power to act on your behalf and pay your bills, manage your bank accounts, retrieve and open your mail, cancel any unnecessary memberships you may have, etc.
I’ll be talking more about revocable living trusts in a future post, but I get asked the following question quite a bit:
[accordion][toggle title=”Why is it necessary to have a durable power of attorney when you have a revocable living trust?”]A durable power of attorney works in conjunction with a revocable living trust to empower your agent to do things that the successor trustee in the revocable living trust cannot do. For example, a successor trustee cannot manage assets that are not funded into the revocable living trust, so one of the powers granted to your agent is the power to fund assets into the revocable living trust.[/toggle][/accordion]
Health Care Power of Attorney
A health care power of attorney gives the legal authority to another person to consent, on your behalf, to the refusal of any and all medical care on your behalf.
To be invoked, a physician must determine that you are unable to make or communicate medical decisions on your own. In your health care power of attorney, you may authorize your agent to consent to the withholding or withdrawal of life-prolonging measures, and you may direct your health care agent regarding the medical treatments that you would or would not want.
In addition to these “life and death” decisions, you may also authorize your agent to make more routine medical decisions for you.
In the event that you do NOT have a health care power of attorney in place, your attending physician will ask your spouse or next of kin to consent to treatment. Under North Carolina law, if your attending determines that (1) you have an incurable or irreversible condition that will result in your death in a relatively short period of time, or (2) you are unconscious and, to a high degree of medical certainty, will never regain consciousness, then the decision to withhold or withdraw life-prolonging measure may be made by your attending physician after consulting with your guardian, attorney-in-fact, or spouse or next of kin.
Which begs the question…
Why is a health care power of attorney necessary?
A health care power of attorney is recommended to prevent potential disputes between your family members over your care. A great example of what can happen when no health care power of attorney form is in place is the Terry Schiavo case out of Florida.
What about living wills?
In North Carolina, a living will, which is also referred to as an “Advance Directive for a Natural Death”, is a legal document which gives you the authority to direct whether your life will be prolonged by medical procedures when:
- You have an incurable or irreversible condition that will result in your death within a relatively short period of time;
- You become unconscious and your health care provider has determined that, to a high degree of medical certainty, you will never regain consciousness; and/or,
- You suffer from advanced dementia or any other condition which results in a substantial loss of your cognitive ability, and your health care providers have also determined that this loss is not reversible.
I know what you are thinking – why would you need both a living will AND a health care power of attorney?
The living will is what you want to happen, and the health care power of attorney grants the agent to make the decision according to your wishes. It’s a legal technicality, but there is an important distinction.
When you sign your living will, you can choose which document will control.
Obviously, these are important decisions and you should consult with your family members and possible an attorney before you sign either a living will or health care power of attorney form.
How to Execute (i.e. sign) a Power of Attorney?
For all three of the documents referenced above, you will need to have a notary present. You can’t just print one of these forms off the internet, fill it out, sign it, and call it a day. They all need to be properly notarized.
In addition, for the health care power of attorney and the living will, you will need two “disinterested” witnesses in addition to a notary.
If you are a resident of North Carolina, we recommend that you file a copy of your health care power of attorney and living will with the Advance Health Care Directive Registry that is maintained by the Secretary of State. The filing fee is $10 and you will receive a password allowing remote online access to your documents. We provide this service for our estate planning clients.
Your durable power of attorney is typically filed with the Register of Deeds office in the county where you reside.
Any of these documents can be revoked by you at any time, or replaced with new documents as life circumstances change.
We do NOT recommend that you store these documents in a safe deposit box or locked safe as your agents may not be able to retrieve them when they are needed.
If you have any questions about whether you need a power of attorney or living will, please feel free to contact our office at (919) 460-5422 or fill out our online contact form.