Powers of attorney

(This content was originally featured in the newsletter 7/15/2016)

The purpose of this article is to emphasize the differences between the two types of power of attorney forms available under Ohio law and explain some pitfalls in giving someone a power of attorney. In general, there are two types of power of attorney forms available under Ohio law: Health Care Power of Attorney (HPOA) and a Business Power of Attorney (BPOA). This part may be self-explanatory, but the HPOA is so another person can make health care decisions on your behalf, and the BPOA allows another person to make financial or business decisions on your behalf. The part that many people do not know is the effective date of each of these forms.

Generally, the HPOA is only effective when the person giving the HPOA becomes unconscious or unable to provide direction to medical personnel as to decisions that might need to be made regarding that person’s health. So, the person must not be able to speak for themselves, then the HPOA becomes effective which allows another person to make the decision. In the past, doctors would regularly allow spouses to make decisions for an unconscious spouse. However, because of the tightening of the HIPPA regulations, it now recommended that all people get a HPOA, even if you are married. Some doctors will even refuse to give medical information to a spouse without this form. Finally, most HPOA have a section called a living will. If you are permanently unconscious with no hope of resuscitation, by completing the living will, your HPOA will be authorized to direct the doctor to “pull the plug.” This is different from a DNR (Do Not Resuscitate) which would prevent a doctor from even conducting CPR if it would save your life.

Unlike the HPOA, the BPOA becomes effective immediately! I highly caution anyone considering getting one that they select someone who is very trusted and who won’t abuse the power. While the BPOA form can be limited in scope to one or a few financial areas, if full power is given under the BPOA, the person will have the ability to access (and clear) all bank accounts, investment accounts, and the person could even sell your home and collect the proceeds. When used correctly, the BPOA will allow the person appointed to manage the funds on your behalf and the funds will always be used on your behalf. However, because of the nature of the BPOA, the opportunity for fraud and misuse is high.

One overall benefit to having both forms comes in the form of avoiding a guardianship. In the event that you are no longer able to care for yourself, a Court may deem you incompetent and could appoint a guardian to manage both your health and living decisions as well as your financial decisions. However, where both a HPOA and BPOA are present, a court will be more reluctant to appoint a guardian because all aspects of the incompetent person’s life can be managed by those already appointed. Look for my future article on guardianships and what they mean for your family for more information.

-Attorney Michael Wagner