By Charles Lambdin, Elder Law Clinic Student, Spring 2016
As parents age, they often adopt a power of attorney allowing their spouse, child, another relative, or close friend to make decisions for them as an agent in the event they cannot make those decisions for themselves. This power of attorney can be designed to activate only when the individual becomes mentally incapacitated (i.e. unable to handle his own financial affairs). At least one physician must determine that the individual is mentally incapacitated. With these safeguards in place, concerns about the amount of power being handed over decreases. The power of attorney may be broad in scope, but the powers within it are not readily accessible until incapacity. This is commonly referred to as a “springing” power of attorney.
But what happens when an adult child needs some assistance immediately even though he still has the mental capacity to make most of his own decisions? This is where the strengths and weaknesses of having a caretaker parent become more obvious. Caretaker parents often provide many benefits to disabled adult children; they may take them to appointments, manage their affairs, sort their prescription medications, and provide a loving atmosphere free from the guilt that one might feel from relying on a caretaker. There is a downside, however. Parents are used to making decisions on behalf of their children whether by opening up a savings account at the bank or filing their taxes during those college years when many children are barely aware that they are paying taxes. Adult children with caretaker parents walk the fine line between being an independent adult and a dependent child. They may need their parents to help manage some of their affairs but do not want to give up full control.
This is where a “split” power of attorney can help. A power of attorney can be designed to come into effect immediately. This gives the agent the ability to exercise the powers as soon as the document is signed. A mildly-incapacitated adult child might find this very useful. It would allow the caretaker parent to speak with creditors, talk to doctors, and manage the adult child’s finances whenever it was necessary for the parent to step in. The risk, however, is that the caretaker parent might take things too far. This may include selling or transferring assets without the adult child’s consent or making large purchases that the child may need but should also be involved in. However, a power of attorney that is limited in scope could protect the adult child’s relationship with the caretaker parent by narrowing the powers given to the caretaker parent. The powers could be limited to only paying bills and picking up medications, for example. Any day-to-day task that the adult child needs help with can be included. The broader scope of powers that one usually finds in a power of attorney would then exist in a “springing” power of attorney. The springing powers would only come into effect if the adult child becomes mentally incapacitated. Thus, by narrowing the scope of the powers that are immediately available, the adult child and the caretaker parent avoid the risk of overstepping boundaries and are protected by the second springing power of attorney that gives the caretaker parent full power to manage the adult child’s affairs should he become mentally incapacitated.