Your Durable Power of Attorney
For most people, the “durable general power of attorney” is the most important estate planning instrument available--even more useful than a will. A general power of attorney allows the person(s) you appoint -- your "attorney(s)-in-fact" or “agent” -- to act in your place for financial or personal purposes should you ever become incapacitated or simply not want to manage your affairs. More than one individual may be appointed should you choose.
In such case, the person(s) you choose will be able to step in and take care of your financial or personal affairs as set out in the document. Historically, an agent could only do what the principal could do so if the principal is not “competent” the agent could not act. But, under a Kentucky law, with a “durable” power of attorney the agent can act even if the principal is “incompetent” with diminished capacity. Without power of attorney, no one can represent you unless a court appoints a conservator or guardian. That court process takes time, costs money, and the judge may not choose the person you would prefer. In addition, under a guardianship or conservatorship, your representative may have to seek court permission to take planning steps that she could implement immediately under a simple durable power of attorney.
A power of attorney may be limited or general. As an example, a “limited” power of attorney may give someone only the right to sign a deed to property on a day when you are out of town. Or it may allow someone to sign checks for you on a specific account. A “general” power is comprehensive and gives your attorney-in-fact all the powers and rights that you have yourself that are set out in the document.
A power of attorney may also be either current or "springing." Most powers of attorney take effect immediately upon their execution, even if the understanding is that they will not be used until and unless the grantor becomes incapacitated. However, the document can also be written so that it does not become effective until such incapacity occurs. In such cases, it is very important that the standard for determining incapacity and triggering the power of attorney be clearly laid out in the document itself.
Attorneys report that their clients are experiencing increasing difficulty in getting larger banks or other financial institutions to recognize the authority of an agent under a durable power of attorney. In Kentucky, there is no requirement that someone recognize a power of attorney. A certain amount of caution on the part of financial institutions is understandable: when someone steps forward claiming to represent the account holder, the financial institution wants to verify that the attorney-in-fact indeed has the authority to act for the principal. Still, some institutions go overboard, for example requiring that the attorney-in-fact indemnify them against any loss. Many banks or other financial institutions have their own standard power of attorney forms. To avoid problems, you may want to execute such forms offered by the institutions with which you have accounts. In addition, many attorneys counsel their clients to create living trusts in part to avoid this sort of problem with powers of attorney.
While you should seriously consider executing a durable power of attorney, if you do not have someone you trust to appoint, it may be more appropriate to have the probate court looking over the shoulder of the person who is handling your affairs by appointing a voluntary “curator.” When appointing a representative, the court is encouraged to respect your nomination "except for good cause or disqualification."
Your Medical Directive TOP
Any complete estate plan should include an advance medical directive such as a Medical power of attorney. This term may encompass a number of different documents, including a health care proxy, a durable power of attorney for health care, a psychiatric advance directive, a living will, and medical instructions. The exact document or documents will depend on the choices you make.
Both a health care proxy and a durable power of attorney for health care designate someone you choose to make health care decisions for you if you are unable to do so yourself. A broader medical directive may include the terms of a living will, but will also provide instructions if you are in a less severe state of health, but are still unable to direct your health care yourself.
Living Wills / Organ Donation
A Living Will is an “end of life” document, executed when an individual is fully able to make such decisions, which provides guidance to medical providers and family members regarding the signer’s personal wishes for end of life treatment choices. This is the document that will summarize preferences for life prolonging measures when the signer cannot express his/her own wishes of whether to receive (or remove) intervention with ventilator/respirators, feeding tube administration and similar treatment if the individual is “permanently unconscious or in a terminally ill condition.” The document may go so far as to address quality of life issues and nursing home placement. Typically a “surrogate” (someone who stands in the shoes of the principal) is appointed to advise the medical provider of the decisions. Alternatively, the surrogate may be appointed and empowered to make the decisions for the principal signer. This document is very valuable to family members who may struggle with closure when imminent death demands a decision.
A second and very important function that can be served with the Living Will is advise the provider that the principal wishes to be an organ donor. This provision can be so broad as to include donating one’s entire remains to benefit educational science or simply to limit the donation to specific body parts such as one’s corneas, heart, kidneys, etc.