Why do I need a Durable Financial Power of Attorney and Health Care Proxy now?
We, especially Baby Boomers and Gen-Xers are consumed with retirement savings, but we tend to play-down or stick our heads in the sand when it comes to that tsunami of caregiving and long-term care issues that can leave a huge hole in all our carefully laid out retirement plans.
Even when we are bold enough to have taken precautions with long-term care financial planning, consider this: about 7 in 10 people will spend a significant amount of money on long-term care.
First, what is a Power of Attorney?
It’s a legal document that gives someone (called your “Agent”) the complete power to act as you in all matters financial or concerning your health care. Your Agent will have the authority to spend, invest, purchase and liquidate your assets at will. It is a very powerful document. You must choose your Agent wisely, but you must choose. And here’s why.
If the likelihood of your needing someone to make decisions for you during a serious or chronic illness is 70% (7 in 10, remember?) then YOU want to decide who that person is, don’t you? Especially, if that person is in charge of all your money…..or your health.
If you don’t pick that person, that Agent, guess who will? A court. If you need someone in charge of your affairs, because you are disabled and you haven’t executed a Power of Attorney document, someone must go to court and ask for a Guardianship. Nobody really wants that. It is expensive, time-consuming, and you are required to report every penny you spend and every medical decision you make as a Guardian to the Court.
This is true even if the person who is disabled is your spouse. This is especially true in the financial world we have now created for Baby Boomers and those behind us. Saving money has become an exercise in 401Ks and IRAs. If your spouse has the bulk of his/her money in a 401K or something similar or IRAs (and everyone does now), you cannot access that money when they are disabled if you don’t have the proper legal documents.
That’s why every adult should execute a Durable Financial Power of Attorney and a Health Care Power of Attorney or Proxy (it’s the same thing) and keep it in a safe place until you need it, which I hope is never. But being prepared is always better than being unpleasantly surprised.
Cathy Sikorski is a practicing attorney dealing in Elder Law. She has been a significant caregiver for the past 25 years. Cathy does presentations, seminars, radio programs, television, and podcasts.
Her first book Showering with Nana: Confessions of a Serial (
killer) Caregiver was released by HumorOutcasts Press.
Corner Office Books, a business imprint of HumorOutcasts Press released Cathy’s second book premiered as a #1 Amazon book Who Moved My Teeth?, a practical and legal guide for adults and caregivers.
Cathy has been featured on the Huffington Post, and AARP and is a SheSource Women’s Media Expert. Cathy has been recognized by financial, legal and aging organizations as a key educator and thought leader. Humor is a vital part of her presentations and she can be seen on the West Chester Story Slam YouTube channel.