As attorneys, we all understand the critical importance of appointing a legal agent to manage financial decisions in the event of incapacity. Most of us have our own Powers of Attorney in place—and likely for our parents as well. However, the longer I work in the long-term care field, assisting families with Medicaid, the more I realize how little the general public understands about this essential document.
Many people recognize the need for a will. Some even have a Healthcare Power of Attorney. However, far too many overlook the financial Power of Attorney—until it is too late.
Every day, I witness the consequences of not having a financial POA. Nursing care is extremely expensive. Most individuals cannot afford to pay privately and must apply for Medicaid, a program that requires extensive financial documentation. If someone is hospitalized or in long-term care and cannot access their own records, another person must be legally authorized to do so. Without a POA, there is usually only one option--court intervention.
We all know what happens next: guardianship or conservatorship proceedings. These are costly, time-consuming, and stressful. Meanwhile, bills go unpaid, debt accumulates, and families face financial chaos—foreclosure, judgments, and even bankruptcy.
Why do so few people have a POA in place? In my experience, it is due to misinformation and fear. Common misconceptions include:
- “I need a lawyer to do it.” This is not true. While having a lawyer prepare a POA and other estate planning documents is preferable, most states offer simple, statutory POA forms online. They are easy to complete and execute, and many State Bar websites provide free templates.
- “I am married, so I do not need one.” Also false. Marriage does not grant automatic access to financial accounts or documents such as pension statements, IRAs, or life insurance policies— all verifications needed to establish Medicaid eligibility .
- “I am afraid of being taken advantage of.” This is a valid concern. However, safeguards exist—such as limiting authority or using a springing POA that only becomes effective upon incapacity.
As attorneys, we must do more than advise our clients. We must educate our communities. I have had this conversation with neighbors, friends, hairdressers, and parents of college students or military recruits. It is always well-received, even by those who already have a POA in place.
What is obvious to us is often the last thing on someone else’s mind. Let us continue to spread the word. A simple conversation can prevent a legal and financial crisis in the future.
