Disability Documents – Durable and General Power of Attorney

What’s the difference between a Durable and General Power of Attorney?
Learn about the Disability Documents like Financial Power of Attorney, Medical Power of Attorney, and Personal Care Plan in this episode of Daily Wisdom!

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Episode Transcript

Disability Documents

In reality, there’s no difference between these two things. So really at the end of the day when we’re talking about Disability Documents, we recommend three different things. We have a Financial Power of Attorney, a Medical Power of Attorney, and then what we call a Personal Care Plan, which gives instructions to the Financial and Medical Power of Attorney on how best to care for someone if they were to need long-term care. But the two biggies are that Financial and Medical Power of Attorney.

Now a Financial Power of Attorney, we call it a Financial Power of Attorney, you might also hear it called a Durable Power of Attorney. The word durable means that it’s effective even if the person’s incapacitated. So every Financial Power of Attorney we do is a Durable Financial Power of Attorney. And then also it’s a General Power of Attorney because we list out all the different things that that individual can do if you were to get a knock on your head versus a Limited Power of Attorney. A Limited Power of Attorney would be limited to one specific transaction. So sometimes if you were closing on a house and you weren’t able to be there in person, you might appoint someone as a Limited Power of Attorney where they can handle that limited transaction.


Financial Power of Attorney

But really what we’re doing in our office when we’re doing a Financial Power of Attorney, when we’re setting up an estate plan, we’re creating your rule book. We’re doing a General Durable Power of Attorney, that is general. It gives the authority to do all these different things on behalf of the person from a financial standpoint. And it’s durable, meaning if the person’s incapacitated they still have that authority. It’s not revoked due to incapacity.

Now, there is an interesting question between what’s called an Immediate Financial Power of Attorney versus a Springing Financial Power of Attorney. So Springing versus Immediate. We do mostly Immediate Financial Powers of Attorney, where the person you’ve appointed has the authority to make these decisions for you. Typically it’s the spouse first, and then kids, if you have kids. But also there might be what’s called a Springing Power of Attorney. The problem with a Springing Power of Attorney is for it to be effective you need to have two licensed physicians, two doctors, signing off to say that someone’s incapacitated. So that’s the first problem, is they’re trying to wrangle two doctors together to make a determination like that, that can slow down the process.


Legal Authority to Make Decisions

The second big issue is that we don’t go from healthy to completely incapacitated. A lot of times we go through kind of a slow gradual decline where someone might not be completely incapacitated or have Alzheimer’s dementia, where they don’t recognize someone, but they might just get to the point where as they age they don’t want to have to worry about paying the bills, or things like that. That’s where that Springing Power of Attorney ends up failing. And so for that reason, a lot of times we’re doing an Immediate Financial Power of Attorney. So again, a General Durable Power of Attorney, really those are the same thing we’re all referring to, what’s called a Financial Power of Attorney. Someone to give you legal authority to make decisions.

And then a Medical power of Attorney, you might hear this called different things, a Health Care Proxy. In Michigan, the technical term is a Patient Advocate Designation. You might hear it called a Living Will, Advanced Directives. Really, these are all the same thing. All referring to this Medical Power of Attorney, a document appointing someone to make medical decisions. Now what a Medical Power of Attorney is not, it’s not a DNR. So it’s not a DNR. A DNR is a do not resuscitate. And what that says is that the EMT comes, and because I have a heart attack they’re not going to resuscitate me if they see the DNR. That’s not what most people want, unless there were staying in the assisted living or a nursing home, or dealing with other issues. Typically, we don’t want a DNR. Instead, we want a Medical Power of Attorney that has end of life decision-making in it.


Personal Care Plan

And then third thing, is a Personal Care Plan. In a Personal Care Plan if the Medical Power of Attorney gives a guidance with regards to end of life decision-making, the personal care plan gives direction with regards to long-term care planning. Like, do you want to be kept at home as long as possible? Certain books or music you like to listen to. Certain foods you like or don’t like. Certain religious preferences, and things like that. So we think that’s a good addition to the Financial and Medical Power of Attorney. And collectively, we call these three things together Disability Documents. And really, this is your rule book if you were to get a knock on your head, if you were to be incapacitated, if you have a stroke, or diagnosed with dementia these documents are key in that situation.


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