It’s very easy for an estate planning lawyer to tell everyone “make sure you have a power of attorney.” We talk about all the problems that can occur without one. You could be unable to pay your bills or make medical decisions. You could even require a guardianship if you cannot care for yourself. But lawyers do not often use real examples to emphasize the importance of a power of attorney. I want to take you through a cautionary tale involving my own family. Fortunately, this tale has a happy ending.
Our family’s story
Like many Pennsylvanians, I have elderly loved ones in my family. Very few of these family members have done any estate planning despite my nagging them! One day out of nowhere, one person asked to set up estate planning. We’ll call her Ginny. Ginny wanted someone to handle her finances and medical decisions if she were unable to do so. She was afraid to do this for a long time; her greatest fear was giving someone too much control, especially over her finances. Fortunately, this is easy to fix! We talked about what would suit her needs. For her finances, she wanted someone to pay her bills. She did not want them to sell her house unless she was in the hospital for a long time. She wanted someone to receive statements from her retirement account, but not be able to handle those funds.
Ginny didn’t think she could have these limits because she printed a form online that didn’t allow her to do so. After a long discussion, I told her this was incorrect. You can always limit an agent’s authority! Together, we created a document which gave her what she wanted. As a result, if she were in the hospital for surgery, someone could pay her bills for her. We signed the documents and forgot all about it, for approximately 1 week.
A very bad fall
Of course, life has a way of throwing unexpected curveballs. Ginny fell down her steps shortly after signing her documents. After that, she learned she needed surgery. Of course, this was not quick surgery. It required weeks of recovery in the hospital. Ginny could not go home after her surgery, because she couldn’t walk up steps. So, she had to go to a care facility.
It is no secret that nursing homes or any type of facility providing long-term care is expensive. Fortunately, Ginny’s agent was on the ball. She immediately spoke to the bank to get access to her accounts. Afterwards, she immediately started paying Ginny’s bills. She spoke directly with the nursing home to make sure they were paid and that everything was going well. She also made sure Ginny was progressing with treatment. Most importantly to Ginny, her agent kept her informed at every step of the way.
A long recovery
Unfortunately, Ginny did not have an easy recovery. Learning how to walk after a bad fall and major surgery is a long road. A few months after her accident, her agent realized Ginny may need to sell her house to pay for the nursing home. This could be a problem, because Ginny was not able to do the work required to list a home for sale. This is a time when attorneys like me are likely to get calls asking about a guardianship. However, Ginny’s agent did not do this. Ginny may not be able to actively be involved in a sale, but she can authorize someone to do so. So, her agent had a conversation about this. Ginny ultimately decided that she wanted to give her agent more control. Ginny is now comfortable and confident that her agent is caring for her best interest.
Key takeaways
There are a few lessons in this situation from my family. First, Ginny initially wanted to limit her agent’s control. Although she changed it later, her first document worked. Her agent immediately had authority to access her bank accounts and pay her bills. She changed the level of control when she realized her agent needed more.
Secondly, Ginny’s agent always kept in touch with her. Just because someone executes a power of attorney does not mean they are incompetent. The opposite is in fact true! Someone unable to communicate decisions is unable to designate such authority. That is why Pennsylvania law provides for guardianship of adults. Ginny’s agent was not required to get her permission before acting. But, by keeping her informed, Ginny trusted her agent was acting in her best interest. This ultimately solidified her decision to expand her agent’s authority.
Finally, Ginny got all of this in order before she needed it. The outcome could have been very different had she never designated anyone to act on her behalf. Somebody would have to guess at what medical treatment she wanted, and somebody would have needed to physically bring Ginny’s bills and checkbook to her. As I write this in 2022, this is not ideal given the conditions with Covid-19. Not only that, but Ginny needed to focus on recovery rather than paying bills. Authorizing someone to do this for her gave her the chance to do that.
I would be remiss in failing to mention the very real cost-savings for Ginny. Had Ginny needed a guardianship, it would have required a petition in court with all the court and attorney fees associated with that. Instead, she paid only for the drafting of her estate plan.
In the course of a given year, you are far more likely to need a power of attorney than need a Will. I understand the ease of saying it isn’t necessary to have one right now. For the most part, that’s true. But the purpose of estate planning is to prepare for the unexpected future. By planning for something she did not intend to use, Ginny enabled her family to protect her when she needed it. I hope this tale helps emphasize the importance of talking with your loved ones about estate planning and planning for the unexpected.
***Names and details have been changed to protect privacy. The content is published with permission of the affected family members.
