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POWER OF ATTORNEY INSTRUMENTS AND ADVANCE MEDICAL DIRECTIVES

The general power of attorney instrument and the advance medical directive are integral aspects of a well–rounded estate plan, regardless of age or economic status.  People often believe that once they have executed a Last Will and Testament they have formed a complete estate plan.  However, the general power of attorney instrument and the advance medical directive are highly recommended, valuable instruments to complete the estate planning process.

The general power of attorney instrument and the advance medical directive express an individual’s wishes and authorize one or more third parties to act on his or her behalf, in accordance with such expressed wishes.  The individual who executes the general power of attorney instrument or the advance medical directive, and whose wishes are expressed therein, is referred to as the “principal”.  The third party(ies) who has the authorization to act on behalf of the principal is referred to as the “attorney-in-fact” or “agent”.

Scope of Power

A principal may narrowly or broadly define the scope of power and the circumstances under which the attorney-in-fact or agent may act on his or her behalf under a power of attorney instrument or an advance medical directive.

The authority of the attorney-in-fact or agent to act may be effective upon the execution of the document or upon the occurrence of a triggering event, such as the inability of the principal to act on his or her own behalf.  The inability to act on one’s own behalf may include a lack of physical ability as well as a lack of requisite mental capacity to perform the desired action.  Further, an inability to act on one’s own behalf may be temporary or permanent in duration, depending upon the nature of the triggering event. 

Although a principal may designate multiple individuals to serve as attorney-in-fact or agent at the same time, a potential issue arises when the designated attorneys-in-fact or agents are unable to reach a majority or unanimous decision (depending upon the terms of the instrument) with regard to the contemplated action.  As an alternative, the principal may designate one of the attorneys-in-fact or agents as the final decision maker in the event of a disagreement or deadlock, or the principal may designate only one attorney-in-fact or agent to serve and designate one or more successor attorneys-in-fact or agents who are authorized to act in the event the initially–named attorney-in-fact or agent is unavailable or unable to serve for whatever reason.

POWER OF ATTORNEY INSTRUMENTS

A power of attorney instrument is a legally binding instrument that authorizes an attorney‑in‑fact to act on behalf of a principal in certain situations and/or upon the occurrence of a triggering event.  A power of attorney instrument can be an instrument of convenience (for example, in the event the principal is physically unable to attend the closing for a real estate transaction).  A power of attorney instrument also can be an important tool in the event the principal should become incapacitated or otherwise lack the requisite mental capacity to perform the desired action(s).  Through a power of attorney instrument, the principal is able to designate the individual(s) who the principal empowers to make decisions on his or her own behalf.  Through a power of attorney instrument, the principal is also able to set forth the scope of the attorney-in-fact’s authority, including the limits of such authority, if any.

General and Special Power of Attorney Instruments

In a general power of attorney instrument the principal grants the attorney‑in‑fact broad power to handle his or her finances, including management of accounts and authorization to sign checks on behalf of the principal.  In a special power of attorney instrument the principal limits the scope of authority of the attorney-in-fact to narrowly defined areas, such as an authorization to make tax‑related decisions or invest in real estate or even to make gifts.

Durable and Springing Power of Attorney Instruments

A durable power of attorney instrument is effective upon its execution and may remain effective until the principal becomes disabled, dies, or revokes the power of attorney instrument.  In the Commonwealth of Virginia, a durable power of attorney instrument must contain language stating that the attorney-in-fact’s power will not be affected by the subsequent disability of the principal in order for the power of attorney instrument not to terminate upon the disability of the principal. 

The springing power of attorney instrument becomes effective only upon the occurrence of certain triggering events or dates.  A concern associated with springing power of attorney instruments is defining the events or dates that trigger the effectiveness of the instrument.  For example, if the principal wishes for the instrument to be effective only upon his or her mental incapacity, a physician will most likely have to declare the principal incompetent.  Extensive privacy regulations enacted in recent years may deter a physician from willingly disclosing a determination with regard to competency unless the instrument specifically authorizes the physician to reveal such information. 

Durable General Power of Attorney Instrument

For estate planning purposes, the durable general power of attorney instrument provides the attorney-in-fact with the broadest authority to act on behalf of the principal should the principal become unable to manage his or her own affairs.  With proper drafting, the durable general power of attorney instrument can avoid the appointment of a conservator by a court to act on behalf of the principal in the event the principal becomes unable to manage his or her own affairs.  However, the durable general power of attorney instrument is only one aspect of a comprehensive estate plan as the durable general power of attorney instrument terminates upon the death of the principal (if such instrument is not previously revoked by the principal and if such instrument does not terminate upon the disability of the principal).   

ADVANCE MEDICAL DIRECTIVE

An advance medical directive is a legally binding instrument that specifies the health care preferences of an individual, and authorizes an agent to make health care decisions for the individual, in the event the individual is later determined to be incapable of making an informed decision. 

An advance medical directive may authorize an agent to take any lawful actions necessary to carry out the preferences and intentions of the principal, including, but not limited to:

• Granting releases of liability to medical providers
• Releasing medical records
• Making decisions regarding who may visit the patient
• Making an anatomical gift of all or part of the principal’s body after the principal’s death

Although a principal may limit the scope of power granted to the agent under the advance medical directive, the agent typically has broad authority to make decisions related to the principal’s health care and treatment.

Changes in the Law

Previously the laws in the Commonwealth of Virginia provided that an advance medical directive was effective only in the event the principal developed a terminal condition and either death was imminent or the principal was in a persistent vegetative state.  Now an advance medical directive is effective during any time that the principal is incapable of making an informed decision.  A separate medical power of attorney instrument may no longer be necessary in addition to an advance medical directive because of this change in the law.

Requirements of an Advance Medical Directive

Pursuant to the laws of the Commonwealth of Virginia, to be effective an advance medical directive must be in writing and such writing must be signed in the presence of two witnesses.  However, an oral statement, witnessed by two witnesses and the attending physician, made by an individual subsequent to the time the individual is diagnosed as suffering from a terminal condition, will be effective as an advance medical directive.

Attorneys often recommend that the principal request that his or her primary physician place an original advance medical directive in the principal’s medical records as it is the responsibility of the principal to notify his or her physician that an advance medical directive has been made.  However, in the event the principal is comatose, incapacitated or otherwise mentally or physically incapable of communication, any other person may notify the attending physician of the existence of such advance medical directive (and such attending physician is required to promptly make the advance medical directive, or a copy of the advance medical directive, if written, or the fact of the advance medical directive, if oral, a part of the principal’s medical records).

An advance medical directive may be revoked at any time by the principal, so long as the principal is capable of understanding the nature and consequences of his or her actions.  The principal may revoke the advance medical directive by (i) a signed, dated writing; (ii) physical cancellation or destruction of the advance medical directive (or directing another to physically cancel or destroy the advance medical directive in the principal’s presence); or (iii) oral expression of intent to revoke.

Privacy Rights and the Advance Medical Directive

A potential issue one should consider prior to the execution of an advance medical directive relates to the waiver of health-related privacy rights concerning his or her medical records.  Waiver of health-related privacy rights may allow the agent more liberal access to medical records and therefore better equip the agent to make a well-informed medical decision on behalf of the principal.  In order to express his or her waiver of health-related privacy rights, the advance medical directive may set forth the principal’s designation of the agent as his or her personal representative under privacy regulations related to protected health information. 

Multiple Agents

As referenced in the Scope of Power section above, another potential issue one should consider prior to the execution of an advance medical directive relates to the designation of multiple agents serving at the same time.  This issue is especially important with regard to an advance medical directive because medical-related decisions are often time-sensitive and any delay in the decision-making process may negatively impact the health of the principal. 

Advance Medical Directive versus Do Not Resuscitate Order

An advance medical directive is a separate, and different, instrument from a Do Not Resuscitate Order (“DNR”).  A DNR is an order from a physician providing that the principal does not wish to be resuscitated in the event the principal suffers from a cardiac or respiratory arrest.

© 2010 GANDERSON LAW, P.C.