When engaged in estate planning, it is important to understand the three main legal documents that play critical roles to accomplish most planning goals. Many people, especially those who are elderly or seriously ill, find great value with advanced medical directives (aka health care power of attorney).
These documents can be very useful to ensure proper medical care but useless for financial or legal matters. That is why it is equally important to have a financial power of attorney (POA) document to ensure that you have designated someone close to you to make financial/legal decisions on your behalf when you are unable to do so, however limited the time frame.
For health care decisions, an advanced medical directive specifically outlines what type of medical treatment you want in case you are unable to provide directions yourself by naming a loved one to make medical decisions on your behalf. It can greatly simplify your life if you trust the right person to handle this responsibility and the duties are properly carried out.
A financial power of attorney document allows a loved one (the “agent”) to make financial and legal decisions on your behalf when you may not have the capacity to do so due to physical or mental health issues. The scope of the agent’s powers are at your discretion. It can be very broad so virtually any situation may be handled or it may be very narrow so the agent only handles certain types of transactions.
A recent Massachusetts case involving a wrongful death claim based on the murder of a nursing home resident shows legal issues that can arise when one of these POA documents is created, but not the other. Like many, if not all, nursing homes admissions forms, the forms for the late nursing home resident Elizabeth Barrow included an arbitration clause. It stated that legal disputes between the nursing home and resident would be resolved through arbitration (a sort of private trial which acts as an alternative dispute resolution method for the parties), according to the New York Times.
In 2009, Elizabeth Barrow was allegedly murdered by her nursing home roommate. Upon his mother’s death, son and health care power of attorney Scott Barrow filed a wrongful death claim for arbitration and the arbitrator found in favor of the nursing home, citing that Scott Barrow was not given financial power of attorney duties on behalf of his mother, only health care POA responsibility.
Scott Barrow contested that decision, arguing that his mother’s estate wasn’t bound by the arbitration clause because his mother didn’t authorize him to enter into contracts upon her behalf, only to make health care decisions. In 2014, a court ruled in his favor and the case continues on (it was filed in 2010).
It is interesting to note that Elizabeth Barrow’s son Scott signed the nursing home admission forms, not Elizabeth, which likely led to the lawsuit in the first place.
Estate planning provides individuals with the legal tools to empower them to reach their goals and objectives. Are you protected? Contact us today to ensure you have the appropriate legal documents in place, for you and your family. For additional information, click here. For further help, contact our office.