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Top Five Reasons to Update Your Power of AttorneyPrint PDF
Over the years, clients have presented to me medical and financial powers of attorney that were drafted 10 or even 20 years ago, while asking "Does this still work? Do I need to update it?" Sometimes, they still work but only in limited fashion, but most of the time, my answer is yes.
Typically, there are five instances in which you will need to update your power of attorney:
- You executed a power of attorney before 1996;
- You executed the medical power of attorney prior to 2009 and you like flexibility;
- You executed a general power of attorney prior to 2010 and you want to be sure that your agent will have no problems using it;
- Your agents have died, have dementia, moved too far away to be helpful or you want to name someone else; and
- You are separated or divorced and your current power of attorney names your (ex-) spouse.
First, if you executed your power of attorney (medical or financial) prior to August 21, 1996, you need to be aware that the Health Insurance Portability and Accountability Act was enacted thereafter by Congress (the "HIPAA Privacy Act"). The HIPAA Privacy Act requires privacy rights and responsibilities to be addressed and a power of attorney needs to include references to the HIPAA Privacy Act. I have reviewed powers of attorney executed as late as the early 2000s that failed to contain the necessary references to this Act. If HIPAA is not addressed in your medical or financial power of attorney, you need a new power of attorney. The former document is often called some variation of Medical Power of Attorney, Advance Directive or Health Care Power of Attorney, and the latter is often called a Power of Attorney or a Durable General Power of Attorney, for example. All of these would require updates if signed prior to 1996.
Second, if you executed a health care power of attorney prior to 2009, an update would not be required, but you could avail yourself of new flexible provisions adopted in the Virginia Health Care Decisions Act. Key changes included authority of an agent to address mental illness by authorizing the admission of an individual to a health care facility for treatment. Another key change includes authority to include other flexible directions about life-prolonging procedures. Prior to 2009, it was common for many clients to state their wishes, in case of a terminal illness, to avoid the application of artificial life support if it would only serve to prolong the dying process. After 2009, many clients opt to include a proviso that allows the agent to request artificial life support for any purpose during a pre-specified time period, like three or seven days, for example. Common reasons clients like this are 1) to ensure that there is truly no hope of recovery; 2) to allow a grown child studying abroad time to return to the bedside; or 3) to allow family members time to grieve.
Third, the Virginia Uniform Power of Attorney Act was made effective on July 1, 2010. There were several changes to the law that apply to powers of attorney. A few key points include, in part, allowing a power of attorney to be effective even after the principal suffers incapacity, ensuring that third parties such as banks will accept the power of attorney as valid even if only a photocopy is produced, and the addition of specific requirements for so called "hot powers". These are certain powers you are allowed to delegate to your agent in a power of attorney, but only if you specifically state the powers. They include, in part, amending inter vivos trusts (which would be very useful given the current unified credit amount situation), making gifts (and this applies even as between spouses), and designating beneficiaries on various policies.
The fourth and fifth points are the reasons that most clients contact us: either an update of the agents are required for reasons including death, distance, incapacity or age of the individual or the client is separated or divorced from the spouse who is named as an agent in the document.
In summary, if you have powers of attorney of any kind that are signed prior to 1996, immediately request an update. If you have powers of attorney signed prior to 2010, you may wish to update your powers of attorney to remain current and to take advantage of the flexibility that Virginia has afforded its residents to date. Lastly, if your personal situation has changed or that of your agent, then please contact us.
At Bean, Kinney & Korman, the typical cost for a new "two-in-one" Advance Directive/Health Care Power of Attorney is $250/person or $300/couple. The typical cost for a new Durable General Power of Attorney is the same.