Planning for Incapacity

What is a Durable Power of Attorney?

A durable power of attorney enables you to carry on your financial affairs in the event that you become disabled.  Without a properly drafted power of attorney, it may be necessary to apply to a court to have a guardian or conservator appointed to make decisions for you when you are disabled. The guardianship process can be time-consuming, expensive (thousands of dollars) and emotionally draining.
There are generally two types of durable powers of attorney. A “present” durable power of attorney is where the power is immediately transferred to your attorney in fact. A “springing” or future durable power of attorney only becomes active upon your subsequent disability as determined by your doctor. An “attorney in fact” is a person that you appoint to make financial decisions on your behalf in the event of your disability. You can choose anyone to be designated as your “attorney in fact.”  A popular choice is a person’s spouse or domestic partner, a trusted family member, or close friend. The appointment of a power of attorney is important for a number of reasons. Your attorney in fact should carry out your wishes exactly as you have directed. This basically allows you to decide who will make important financial decisions on your behalf. A Durable Power of Attorney is effective immediately upon subsequent disability.

Who can create a Power of Attorney?

Generally, any individual over 18 years of age who is a resident of the state of Rhode Island and who is legally competent can create a power of attorney.

Who may act as an agent under a Power of Attorney?

In general, an agent may be anyone who is legally competent and over the age of 18.  Often, it is a family member such as a spouse, sibling or a child.  More than one person can be named as an agent. However, naming two or more individuals to act together can prove inconvenient. This is especially true if a power of attorney must be exercised promptly.  It is generally advisable to name one individual as agent and then another as an alternate.

How does an agent use a Power of Attorney?

Your chosen agent presents the original power of attorney document to the other party involved in the transaction and signs documents on your behalf. Your agent signs his or her own name, followed by the words “Attorney in Fact for ‘John Doe’”.

What is a Durable Power of Attorney for Health Care?

In accordance with the laws of the state of Rhode Island, you may appoint someone you trust (i.e. a family member or close friend) to make important decisions relating to your medical treatment options if you lose the ability to decide for yourself. You can accomplish this by using a “Durable Power of Attorney for Health Care” or Health Care Proxy where you designate the person or persons to make such decisions on your behalf.  You can allow your health care agent to make important health care decisions. In the alternative you can limit your agent’s authority to make decisions about only certain treatments and provide your agent with instructions that he or she has to follow.  In either event, your agent should make certain that health care professionals follow your wishes and can decide how your wishes apply as your medical condition changes.  Hospitals, doctors and other health care providers must follow your agent’s decisions as if they were your own.

What is a Living Will?

A Living Will informs others of your preferred medical treatment should you become permanently unconscious, terminally ill, or otherwise unable to make or communicate decisions regarding treatment.  The state of Rhode Island has instituted living will laws to protect a patient’s right to refuse medical treatment. In conjunction with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity.

What is a HIPPA Authorization?

Some medical providers have refused to release information, even to spouses and adult children authorized by durable medical powers of attorney, on the grounds that the 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits such releases. In addition to the above documents, you should also sign a HIPAA Authorization Form that allows the release of medical information to your Agents, your Successor Trustees, your family and other people whom you designate.

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