The importance of powers of attorney
The events of 2020 caused many people to evaluate their estate planning needs. When thinking of the most important documents in the estate plan, a last will or a trust most frequently comes to mind. Surprisingly, the most important estate planning documents may be well-drafted health and financial powers of attorney. While it is unpleasant to think of the scenarios where these documents are needed, such as an accident or medical emergency, having such paperwork correctly drafted and in place is a wise and prudent precaution.
Conscious and competent individuals are capable of making medical and financial decisions for themselves. However, when incapacitated, people need a person to manage their finances and make health decisions on their behalf consistently with their preferences. That person is called the agent whereas the individual creating the power of attorney is called the principal.
A properly executed Nevada Durable Power of Attorney for Health Care Decisions allows the principal to authorize the agent to make decisions regarding medical treatment on their behalf. A Living Will, also known as a Declaration, is a form that allows an individual to state their choices for their end-of-life situation. The Nevada Do Not Resuscitate form is a document that instructs medical personnel not to administer CPR to the patient if the heartbeat and/or breathing stops.
A properly executed Nevada Statutory Power of Attorney allows an individual to authorize another person to manage their financial affairs. The agent’s authority is limited to the powers specified in the document. If the agent engages in a real estate transaction, Nevada law requires that the power of attorney be recorded with the local Recorder’s Office.
Powers of attorney are typically made effective immediately upon their execution, even if the principal is able to make his or her own decisions. Alternatively, powers of attorney can “spring” into effect when the principal becomes incapacitated. Powers of attorney are typically durable, which means that they continue to be effective when the principal becomes incapacitated. As long as the principal is competent, the power of attorney can be revoked. A power of attorney expires upon the death of the principal.
The authority outlined in the power of attorney can be very broad, allowing an agent to do almost everything the principal can do. But even then, there are certain actions that the agent is prevented from taking, like voting for the principal in an election. Sometimes, a power of attorney can be more restrictive, limiting the agent to very specific acts based on the principal’s needs. For example, a principal can authorize their agent to manage real estate holdings while the principal is on vacation.
It is prudent to have an honest discussion with a physician and agent regarding any anticipated health concerns. As we experience the unprecedented effects of COVID-19, it is important to consider this course of action if the virus is contracted. While most people have mild symptoms and recover at home, some experience severe symptoms requiring intubation and ventilator support.
A power of attorney becomes most important if an individual becomes incapacitated and is unable to make his or her own health and financial decisions. If the individual has well drafted powers of attorney in place for both health and finance, an agent will be able to step in immediately; otherwise, a court’s involvement may be necessary.
So, if you do not have powers of attorney, you should meet with an attorney to get them prepared. If you do already have powers of attorney in place, it is prudent to have them reviewed to make sure they are effective.
Natalia Vander Laan is a Minden attorney practicing estate planning, family law, and workers’ compensation.