Financial Power of Attorney vs. Health Care Power of Attorney

Imagine you are in the hospital and cannot handle your own decisions. Someone may need to pay your mortgage while someone else talks with your medical team. Those responsibilities involve different kinds of authority.

A financial power of attorney and a health care power of attorney can both be part of an estate plan. However, having one does not automatically mean you have the other.

What does a financial power of attorney cover?

A financial power of attorney allows an agent to act for the person who signed it, called the principal. The document determines which financial matters the agent can handle. This may include dealing with bank accounts, paying bills, or managing property.

Under Iowa Code section 633B.109, the power generally becomes effective when executed unless the document provides for a later date or event. That means it should not be assumed that every financial power of attorney waits until incapacity.

Section 633B.104 also makes a power created under that chapter durable unless it expressly provides otherwise. Durable means incapacity does not itself end the authority. It does not mean the agent becomes the owner of the property.

What does a health care power of attorney cover?

Iowa chapter 144B addresses decisions about medical care. It allows an appointed agent to make health care decisions when the principal cannot make them, as determined by the attending physician or physician assistant.

The health care document can include instructions and limits. The person who is good at tracking bills may not be the person you want speaking with a medical team, although the same person may be appropriate for both roles.

How should the documents work together?

Think about a decision involving a care facility. A health care decision and a payment arrangement may arise from the same situation, but they are still different questions. Each person needs to understand their role and communicate with the other.

When reviewing your plan, ask who you have named, when their authority begins, and what happens if that person cannot serve. Also make sure the people who may need the documents know where to find them. A signed document is more useful when it can actually be located.

Tyler ThompsonAuthor