馃攳
Health Care Power of Attorney vs. Financial Power of Attorney - What's the Difference? - YouTube
Channel: Burton Law LLC
[0]
Welcome back to our Estate Planning 101 Series.
I'm attorney Thomas Burton, I'm an estate聽聽
[7]
planning and asset protection attorney here in聽
Wisconsin. Thank you for joining us once again.聽聽
[14]
So today's topic is Healthcare Power聽
of Attorney versus Financial Power of聽聽
[20]
Attorney - what's the difference? So this聽
question comes up a lot in my practice聽聽
[28]
and the terms surrounding these two documents聽
are similar but they serve two distinct purposes聽聽
[36]
and today in Estate Planning 101, we're going聽
to go through the differences between these聽聽
[41]
two documents and what each is used for. So we'll聽
start off here, I've got on the yellow legal pad,聽聽
[52]
the healthcare power of attorney and POA, if聽
you see POA, that's short for power of attorney.聽聽
[59]
A. I got tired of writing it out every time聽
and B. this is a common abbreviation you may聽聽
[66]
see people use, so I'm using it in the video to聽
help it get familiar in your mind. So both the聽聽
[72]
healthcare power of attorney and the financial聽
power of attorney allow you to name an agent聽聽
[79]
and that person is designated to act on聽
your behalf if you're ever unable to act聽聽
[86]
for yourself so in general, we think we use the聽
term incapacitated meaning you're unable to make聽聽
[93]
these decisions on your own and we'll get into聽
the difference a little later but you can name聽聽
[99]
a primary agent and a successor agent, number two,聽
under both documents. You can name more than that聽聽
[106]
even but I, for sure, recommend if you do the聽
document, you name primary and one successor聽聽
[114]
or at the very least, a primary, if you聽
can't come up with the name of a successor聽聽
[119]
but I'll just say commonly for married couples,聽
they often name each other as the primary and then聽聽
[124]
a backup and if you're single, you name whoever聽
you choose a friend, a relative, someone you trust聽聽
[131]
and a backup and each one is a different purpose.聽
So these don't have to be the same person. The聽聽
[138]
person who's good at making health care decisions,聽
may not be the person best at making financial.聽聽
[145]
So keep that in mind and that's why we聽
separate the powers. Now, the first major聽聽
[150]
difference a healthcare power of attorney聽
is effective only if you are incapacitated聽聽
[158]
and if you look at the new Wisconsin power of聽
attorney for health care which went into effect聽聽
[163]
earlier this year, it used to say two聽
physicians must certify your incapacity or聽聽
[170]
a psychologist and a physician. Now they've聽
included nurse practitioner and or a physician,聽聽
[179]
it can be a combination of those two that certify,聽聽
[183]
there's a certification paragraph you should聽
examine carefully but that would trigger聽聽
[188]
the health care agent acting聽
for you. So for health care,聽聽
[193]
constitutionally, as long as you are able to聽
communicate and you have the mental capacity,聽聽
[201]
you are in charge of your own health care聽
decision. So even if you execute the document聽聽
[206]
and let's say in the document, you say you don't聽
want feeding tubes used or you want them removed.聽聽
[213]
If you're alert and laying there on the bed,聽
your agent cannot have the feeding tubes removed.聽聽
[219]
Okay? Because you have capacity. It only kicks聽
in when you're incapacitated. Now the financial聽聽
[227]
power of attorney, let me turn this here, can be聽
springing or immediately effective. So sometimes聽聽
[233]
you hear this term springing and essentially,聽
that's what's happening with the healthcare power聽聽
[238]
of attorney, it's springing meaning it springs聽
into life upon a certain event happening and聽聽
[245]
for the healthcare power of attorney, that event聽
happening is those two doctors or the doctor and聽聽
[251]
the nurse practitioner, signing a statement聽
that you're incapacitated and unable to act聽聽
[258]
on your own behalf. So for the financial power聽
of attorney, we can include a springing provision聽聽
[265]
but it's less common to do it here but it's up聽
to you but some, again, for a married couple,聽聽
[272]
often they're comfortable having it be immediately聽
effective for the spouse and it could be springing聽聽
[279]
for the second but a lot of times you want someone聽
under the financial, to make, pay bills and things聽聽
[286]
like that and so in that sense, sometimes we聽
don't make it spring but be aware, the health care聽聽
[292]
essentially, is always springing only upon your聽
incapacity to make your healthcare decision.聽聽
[300]
Okay, so next, we're going to move to what they聽
each govern and I got into this a little bit but聽聽
[308]
the healthcare POA, governs healthcare聽
decisions only while incapacitate,聽聽
[314]
again, if you're alert, able to communicate,聽
you govern your own healthcare decisions.聽聽
[319]
So for thinking about this, it's easiest to think聽
about being in a coma, right, because you're alive聽聽
[324]
but unable to communicate. That's a classic case聽
the healthcare document would come into place. The聽聽
[331]
financial power of attorney is authority to manage聽
assets. So think of financial assets and some,聽聽
[338]
we call it financial power of attorney, sometimes聽
people just call it a general power of attorney聽聽
[343]
or a durable power of attorney but the key is聽
that it doesn't cover health care decisions.聽聽
[349]
It's about managing assets such as real聽
estate, stocks, bonds, annuities, pay bills,聽聽
[355]
pay taxes, sell property and if you use the聽
statutory form, there's boxes you can check聽聽
[361]
next to each of these powers. Now to be聽
effective, I often recommend you want to聽聽
[366]
give your agent broader powers depending on your聽
situation and what you're doing the planning for聽聽
[374]
but discuss that with your attorney when聽
deciding. If you don't really trust your agent,聽聽
[380]
you're going to want to limit those powers and聽
then, I would say, I would consider, picking聽聽
[385]
someone else's agent or an independent third party聽
such as a trust company or a fiduciary to act,聽聽
[395]
okay, so, the healthcare power of attorney聽
then covers things like feeding tubes,聽聽
[400]
do you want feeding tubes used and there's聽
language in there about what conditions. Also,聽聽
[408]
end of life care such as would your agent have聽
the authority to admit you to a nursing home?聽聽
[414]
Then there's a section on special provisions,聽
limitations, desires, you can write something in,聽聽
[420]
a special request like for example,聽
I would like to be in a room near聽聽
[426]
a window or sunlight or things that are important聽
to you, other things related to your health care聽聽
[433]
and then organ donation, also in the healthcare聽
power of attorney, at the end, you can make your聽聽
[439]
choices regarding organ donation. So, if you have聽
this on your driver's license, I suggest you make聽聽
[444]
it consistent with that because if you got in聽
the situation, they would look at that document.聽聽
[452]
So overview, the healthcare governs all these聽
healthcare decisions and financial governs聽聽
[458]
things related to your property, financial聽
assets and they don't cross. So the health care聽聽
[466]
agent can't make decisions about this and the聽
financial agent can't make decisions about this.聽聽
[471]
The two distinct things by law. So here's how聽
it works, if you regain capacity, the agent's聽聽
[483]
authority under your healthcare power of attorney聽
ends, so, let's say, you wake up from the coma,聽聽
[489]
you have capacity, so you say, "wait a聽
minute doctor, I'm alert, I'm functioning,聽聽
[495]
I'm making these decisions, not my agent." The聽
financial power of attorney is often that were聽聽
[502]
durable which means it survives your incapacity.聽
So in most instances, you want this, you want聽聽
[508]
a durable power of attorney because if you are聽
incapacitated, if you're in the coma over here,聽聽
[515]
you want someone who has authority to pay your聽
bills, file your taxes, while you're in the coma.聽聽
[522]
If it isn't durable, it would mean, it聽
wouldn't survive your incapacity and that聽聽
[529]
often defeats the purpose of聽
creating it. So just be aware of that聽聽
[534]
but again, the healthcare power of attorney聽
constitutionally, if you regain capacity,聽聽
[540]
mental capacity to act, you have the authority.聽
Then we go down here, what happens if you don't聽聽
[547]
have one to default, if no healthcare power of聽
attorney then and you have this medical condition聽聽
[556]
and know you haven't put a living will together,聽
with wishes, separately, you have no one to act,聽聽
[564]
your friends or relatives are going to have to聽
go to court and get a court-ordered guardianship聽聽
[568]
of the person, okay, and this is quite an聽
undertaking because the courts are very聽聽
[576]
reluctant to take away rights from someone,聽
constitutionally, okay? So it takes time,聽聽
[584]
plan on weeks or months and expense. I would聽
budget several thousand in attorney's fees聽聽
[590]
to help you get the guardianship聽
and go through the court process.聽聽
[595]
Probably three thousand minimum, up to聽
contested guardianship can go, you know,聽聽
[601]
ten thousand or more, it depends but just be aware聽
this takes time and the involvement of the court聽聽
[608]
but the law says, if you have a validly executed聽
healthcare power of attorney, the reason you're聽聽
[612]
doing that is to avoid this but I see this happen聽
a lot when, when people don't have one in place.聽聽
[620]
The same with the financial power of attorney,聽
if no financial power of attorney or a trust,聽聽
[626]
let's say, you have all your assets in the聽
trust, then your trustee can act for you聽聽
[631]
if you're incapacitated and this is a聽
great way to do it but if you have no,聽聽
[636]
okay let me switch it over here, if you have聽
no financial power of attorney or trust,聽聽
[641]
court ordered guardianship of the聽
estate, so again, it's two different聽聽
[649]
processes, a guardianship of the person and a聽
guardianship of the estate and sometimes the聽聽
[653]
court will award both and sometimes just聽
one because again, they're very reluctant聽聽
[660]
to get involved in your affairs and give away聽
rights which you traditionally hold. You can do聽聽
[666]
both guardianships at once but sometimes you won't聽
get awarded both, it depends on the facts here.聽聽
[675]
A great reason to have both documents is聽
to avoid the need for those court-ordered聽聽
[680]
guardianships and this often occurs in聽
old age but it can occur at any age.聽聽
[685]
Once you're age 18, if you're in a coma and you聽
haven't filled out a healthcare power of attorney,聽聽
[691]
there's no one to act on your behalf because聽
you're an adult in the eyes of the law,聽聽
[695]
even if you think your parents can act for you,聽
legally they can't. So my recommendation is,聽聽
[702]
if you have anyone over 18, have them fill聽
out that healthcare power of attorney form.聽聽
[709]
So under the healthcare power of attorney,聽
finally let's talk about what the agents聽聽
[713]
are supposed to do. They act according聽
to your wishes on the subject,聽聽
[719]
so if during life you talk to them about your聽
wishes about things, they're supposed to remember,聽聽
[725]
okay, "mom talk to me about this and I'm acting聽
according to her wishes on the subject", so,聽聽
[731]
you can't as the agent, substitute your聽
own thoughts about feeding tubes for mom.聽聽
[736]
You're supposed to follow her wishes,聽
in this case, if mom is the principal.聽聽
[741]
Then if they haven't expressed their wishes in聽
the document on a subject or to you in person,聽聽
[747]
you know how there's a lot of gray area because聽
a big reason to have a health care agent is,聽聽
[754]
I always give the example, if you're in the聽
coma and the doctor needs to decide we could聽聽
[759]
do this surgery or we could do this thing,聽
someone has to be able to make that decision,聽聽
[765]
weigh the odds and think about it, right? So for聽
all the rest, the gray area, you have to do what聽聽
[772]
you believe is in their your but in the principles聽
best interest. So that's the standard, you apply聽聽
[781]
if it's not something they've expressed a wish to聽
you, while they had capacity or in the document聽聽
[788]
and under the financial power of attorney, the聽
agent has a duty to act in your best interest. So聽聽
[795]
same as here, best interest trust meaning聽
they're fiduciary, they aren't supposed聽聽
[801]
to substitute their judgment for your judgment,聽
instead under both, the agent it is a fiduciary聽聽
[809]
acting in your best interest regarding either聽
your health care or your financial affairs.
[817]
So those are the key differences between聽
the healthcare power of attorney and the聽聽
[821]
financial power of attorney and I see a lot of聽
confusion about this so, if you were to ask me,聽聽
[828]
what's one document I should have, in terms聽
of my estate planning and if I could only pick聽聽
[836]
one, what document would I tell you? I聽
would say a healthcare power of attorney聽聽
[843]
document because like I said, many聽
people don't realize when you turn 18,聽聽
[849]
that's the age of majority in the state of聽
Wisconsin and after that you need to name聽聽
[853]
an agent under your healthcare power of attorney聽
to have someone to act for you, so for instance,聽聽
[858]
a lot of kids go off to college at age聽
18. It's a good idea to have them fill out聽聽
[865]
a healthcare power of attorney and get it聽
witnessed before they leave, if you're a parent聽聽
[872]
before they leave the house and the good news is,聽
Wisconsin makes the healthcare power of attorney聽聽
[878]
free, you can download it from the department聽
of health services and even a financial聽聽
[884]
power of attorney, the basic document. Now I聽
recommend working with a lawyer, if you're able聽聽
[890]
and they can guide you through these documents聽
but for someone like the college kid heading off,聽聽
[895]
you can download that healthcare power of聽
attorney and get it filled out before you go聽聽
[901]
and eventually, I may get to a video, I have聽
a video on how you can create your own basic聽聽
[908]
will for free, so check out that video, if you're聽
interested but the process is similar for these聽聽
[914]
other documents. It's more walking through聽
the document, taking your time to make your聽聽
[920]
choices and then signing it in front of the聽
two witnesses because required by the law.
[926]
So I hope today's episode of Estate聽
Planning 101, has been useful to you,聽聽
[934]
again, I wanted to go over the highlights between聽
the differences of an agent under healthcare power聽聽
[940]
of attorney and an agent under a financial power聽
of attorney and I know this stuff is confusing and聽聽
[947]
often the first time for many folks, when they're聽
working with my office. So I'm creating these聽聽
[953]
videos, at my office we believe in empowering the聽
client through education to put you in charge of聽聽
[960]
your own estate planning and what I'm trying聽
to do with these videos is give you the tools聽聽
[965]
to become educated and informed, so聽
then when you meet with your attorney,聽聽
[971]
you can ask more informed questions and use your聽
time wisely, focusing on the other questions you聽聽
[978]
have to be answered and this series, if you walk聽
through this Estate Planning 101 series, my goal聽聽
[984]
is that you could become very informed about聽
the various tools we use in your estate planning聽聽
[991]
before you meet with your lawyer. So thanks聽
for tuning in and we'll see you next time.
Most Recent Videos:
You can go back to the homepage right here: Homepage