When it comes to powers of attorney, there are two basic types: property and healthcare. The person selected to make decisions is called the agent, and the person granting the authority is called the principle. Property powers of attorney are designed to allow the agent authority to sign documents, open and close accounts, and make many other types of financial decisions for the agent. Healthcare powers of attorney are designed to allow the agent to make medical decisions for the principle. Elderly parents often choose to split these two major responsibilities between two or more of their adult children. While this may seem fair, there are a couple reasons why it may not always the best choice.
Imagine one adult child, likely the one given healthcare decision-making powers, has very strong opinions about the type of healthcare that should be provided. For instance, perhaps this child wants the very best and most aggressive care available, regardless of cost. Now imagine that the other sibling holds the power of attorney for property and wishes to be as conservative as possible in order to preserve the inheritance and to ensure the money lasts for the parent’s entire lifetime.
While both children may love their parent dearly, the splitting of responsibilities can create a power struggle, whereby one child overuses healthcare to punish the other child for being too conservative, and the other child responds by tightening the purse strings even more, including refusing to pay for what he or she deems unnecessary. These situations almost always result in litigation.
Confusion and Ambiguity
When one adult child or close relative is chosen to act as a person’s agent for all matters – healthcare and property, then there should be no confusion or misunderstanding. The family and all financial institutions and healthcare providers will be on notice that there is one person who is authorized to make decisions. Granted, other people may be selected as “successors” who may act in the event the chosen individual cannot be reached or is unable for some other reason to serve.
However, if more than one person is selected, or if co-agents are selected, healthcare providers may not fully understand their responsibilities. In these cases, physicians often will require both agents to agree on all treatment, or worse yet, they may accept decisions by either agent without considering the specific language or details of the actual documents. Finally, it can cause tension in the family if the agents cannot agree on care or financial decisions. Again, such situations typically result in litigation.
Therefore, rather than naming co-agents or trying to split responsibilities between multiple individuals, it is usually wiser to name one trusted person as the agent for all matters, then name other trusted individuals as successor’s in the event the first person is not able to serve. Of course, as with anything, there are exceptions. Therefore, it is highly advisable to consult an experienced elder law attorney when preparing powers of attorney.