Domna Antoniadis is a senior staff attorney with New York Legal Assistance Group’s Legal Health Unit, conducting legal clinics at Bellevue Hospital Cancer Center and as part of the Avon Metastatic Breast Cancer Project. She received her undergraduate degree from Fordham University and her J.D. from Fordham University School of Law. She has co-authored and presented on patient navigation in the cancer setting, medical legal partnerships, and public health.
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Cancer can be overwhelming, and little can prepare someone for the experience and challenges of a cancer diagnosis and treatment. However, a financial power of attorney (POA) is a useful tool that can be created at almost any point in the cancer experience to reduce worry and stress.
What is a financial POA?
There are different terms and types of POAs, depending on which state you live in, but on its most basic level a financial POA allows a person, called the “principal,” to select another person, called the “agent,” to assist them in certain administrative, legal, or financial transactions. It is very important to understand that a POA is a legal document. Whenever possible, you should speak with a lawyer to make sure that your POA is done properly, meets your needs, and is valid under your state’s laws.
In our daily lives, there are many activities that only we are allowed to do for ourselves, like managing our own bank accounts or paying our mortgage. When someone is dealing with cancer, these commonplace interactions can become difficult and lead to stress. Not only do everyday situations become challenging, but new ones also arise, like having to speak with health insurance companies, applying for disability insurance, or communicating with government agencies that manage benefits, like Social Security and Medicare.
If someone has a POA in place, then their agent has legal authority to act on their behalf and can help manage these situations. The scope of a POA varies according to the principal’s desires. It can grant broad sweeping powers to an agent, or it can grant very narrowly defined powers to the agent. This is why it is critically important to understand what the document says before signing. In all cases, the agent is required to act on the principal’s behalf and in their best interest. The agent is not permitted to use the principal’s resources or their power for the agent’s own interest.
How do I create a POA?
To create a POA, the principal needs to be legally competent. This means that the principal both understands the nature of the document they are creating (what it says and what it accomplishes) and has a general understanding of their own financial and personal circumstances (for example, remembering they own a home or the number of children they have). Being legally competent is different from having the capacity to make medical decisions. In some cases, a person may no longer have capacity to make medical decisions, but they still have the ability to create a financial POA.
Different states have different requirements for a POA, so it can be helpful to research what your state’s requirements are before writing your POA. Your state may have a standard template available online.
A POA normally needs to be completed and signed in front of a notary. In some situations, 2 other people must also be there to witness the principal signing the POA. This is to make sure that the principal is competent to create the POA and isn’t being forced into the agreement.
A POA can also be completed during “moments of lucidity.” Sometimes a person who often lacks decision-making ability may be able to complete the POA documents during windows of time where they are more aware. For example, a person on severe pain medication may be too sedated or groggy to follow a conversation or remember facts at certain times of day, but in the morning, before their first dose of medication, they may be able to. Having witnesses to the signing of a POA is the state’s way of ensuring that the principal is competent.
Once the principal completes the POA and names an agent, the agent also typically will be required to sign the POA in front of a notary. By doing so, the agent swears that they accept the appointment, will not abuse their power, will follow the terms of the agreement, and will act in the principal’s best interest. The agent can be held responsible if they abuse the power given to them by the POA.
What is a durable POA?
Some POAs are only valid for a set period of time or just for specific actions, such as selling a house, filing your taxes, or dealing with a health insurance company. Some POAs expire if the principal subsequently loses their mental capacity. This means the principal is no longer able to make or communicate their decisions. In contrast, a durable POA is a POA that remains in effect even if the principal subsequently loses their mental capacity. A durable POA might be helpful if a person has a cancer diagnosis that may progress quickly. In these cases, creating a durable POA will allow the principal to be prepared and to choose someone who can help them manage their affairs even if their condition later worsens.
What is the difference between a POA and guardianship?
It's important to understand the difference between having a guardian and appointing an agent through a POA. People are sometimes afraid that if they create a POA, then they will lose the ability to control their life or make their own decisions. When diagnosed with cancer, this is especially scary since a person may already feel like they have no control over their body.
A POA is not the same thing as having a guardian. Guardians have the legal authority to make decisions for the patient, but usually this also means that the patient cannot make their own decisions and cannot limit the powers of the guardian. Unlike guardianship, a POA doesn’t take away the principal’s ability to make their own decisions. It simply grants legal authority to an agent to also act, on the principal’s behalf, in designated areas. In a sense, a POA lets the principal maintain control of their life while also allowing an agent to help them out in an official capacity.
If a person loses their mental capacity but has a durable POA, then the agent can continue helping the principal. This may prevent the need for a guardian to be appointed by a court. This is especially important if the principal is too sick to make their own decisions but has certain issues that need to be addressed, such as accessing the principal’s bank account to pay the rent or mortgage or appealing insurance claims that have been denied.
Is a POA also a health care proxy?
A financial POA is not the same as a health care proxy or a medical POA. A health care proxy or medical POA allows you to choose an agent to make decisions about your health care if, and only if, you are not able to make those decisions on your own. Typically, a doctor needs to confirm that the principal is not able to make their own health care decisions before a health care proxy or medical POA is considered valid. In contrast, a financial POA does not allow your agent to make health decisions, unless the principal specifically agrees in the document to giving the agent limited health-related powers. Health care proxies or medical POAs are legal documents that are entered into separately from financial POAs.
Does a POA ever end?
A principal can revoke the POA at any time and for any reason, so long as they are still legally competent. The principal should provide a letter revoking the POA to any person who has received a copy of the POA (for example, your bank) and destroy all other copies. A principal can also enter into a new POA, designating a new agent, and simultaneously revoke all prior POAs if they state that in the new document. Your home state may have varying procedures for how to revoke existing POAs, and states often have sample revocation letters available online.
A POA also ends automatically when the principal dies. Usually, after a person dies the only ones who may have authority to speak with a bank or help manage affairs would be the executor of their will, a beneficiary, or their next of kin.