Most people think of estate planning as deciding what happens after they die. But one of the most important questions a plan answers is what happens if you are alive and cannot manage your own affairs, whether because of an accident, a stroke, dementia or a long hospital stay. In Ohio, the main tools for that situation are powers of attorney. Without them, your family may have to go to probate court and ask a judge to appoint a guardian. Here is a plain-English overview of how Ohio powers of attorney work.
What is a power of attorney?
A power of attorney is a written document in which you (the “principal”) give another person (your “agent,” sometimes called an attorney in fact) legal authority to act for you. Ohio law treats financial decisions and medical decisions separately, so a complete plan usually includes two different documents:
- A financial power of attorney, governed by Ohio’s Uniform Power of Attorney Act, R.C. 1337.21 to 1337.64.
- A health care power of attorney, governed by R.C. 1337.11 to 1337.17, often signed together with a living will.
The financial power of attorney
Durable by default
Older powers of attorney stopped working at exactly the moment they were most needed: when the principal lost capacity. Ohio’s current law reverses that. A power of attorney created under the Uniform Power of Attorney Act is durable unless it expressly says otherwise (R.C. 1337.24). That means it keeps working if you become incapacitated, which is usually the whole point.
Immediate or “springing”
Under R.C. 1337.29, a financial power of attorney is effective when it is signed unless the document says it starts at a later date or upon a future event. Some people prefer a “springing” power that only takes effect if they become incapacitated. If you choose that route, the document can name who decides that the triggering event has happened. If it does not, the statute provides that incapacity can be established by a written determination from a physician or licensed psychologist who has examined you, or in some cases by an attorney, judge or appropriate government official.
Springing powers feel safer to many people, but they add a step. Your agent may need to obtain a written determination before a bank or other institution will act on the document. An immediately effective power, given to someone you trust completely, avoids that delay. Which approach fits depends on your family and your comfort level.
Signing requirements
The principal must sign the document, or another person may sign in the principal’s conscious presence at the principal’s direction (R.C. 1337.25). If the signature is acknowledged before a notary public, it is presumed genuine. In practice, almost every financial power of attorney should be notarized, because banks, title companies and other institutions will expect it.
Using it for real estate
If your agent will sign a deed, mortgage or other instrument affecting real property, Ohio requires the power of attorney to be recorded (R.C. 1337.04). If you own real estate, it is worth making sure your document is drafted and signed in a way that the county recorder and title companies will accept.
Powers that must be spelled out
Some powers are significant enough that Ohio law does not let an agent use them unless the document expressly grants them. Under R.C. 1337.42, those “hot powers” include the power to:
- Create, amend, revoke or terminate a living (inter vivos) trust
- Make gifts
- Create or change rights of survivorship
- Create or change beneficiary designations
- Delegate the agent’s authority to someone else
- Waive your right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan
- Exercise fiduciary powers you have authority to delegate
These powers can be important for long-term care planning, funding a trust or keeping an estate plan up to date if you lose capacity. They can also be misused. Deciding whether to include them, and with what limits, is one of the most important choices in drafting the document.
When it ends
A financial power of attorney ends at your death, when you revoke it, when its own terms say it ends, or when its purpose is accomplished (R.C. 1337.30). An agent’s authority also ends if the agent dies, becomes incapacitated or resigns. One detail many couples do not know: if your spouse is your agent, that authority ends when an action for divorce, dissolution, annulment or legal separation is filed, unless the document provides otherwise. After death, the power of attorney no longer works, and your will, trust or beneficiary designations take over.
The health care power of attorney
A health care power of attorney lets your agent make medical decisions for you when you cannot make them yourself. Under R.C. 1337.12, the agent’s decision-making authority generally applies only when your attending physician determines that you have lost the capacity to make informed health care decisions. The document can, however, allow your agent to obtain your health information right away.
To be valid, the document must be signed and dated by you and either witnessed by at least two adults or acknowledged before a notary public. Some people cannot serve as witnesses, including relatives by blood, marriage or adoption, your named agent or alternate agent, your attending physician and the administrator of a nursing home where you are receiving care. Your attending physician and a nursing home administrator also cannot be named as your agent, and employees of your attending physician or treating facility generally cannot serve either unless they are related to you or belong to the same religious order.
A health care power of attorney is commonly signed alongside a living will (Ohio’s living will statute is R.C. Chapter 2133), which states your wishes about life-sustaining treatment in specific end-of-life situations. The two work together: the living will speaks to particular circumstances, and the health care agent covers everything else.
Choosing your agent
The document is only as good as the person you name. A few practical points:
- Choose someone trustworthy, organized and willing to serve, not just the oldest child or the closest relative.
- Name at least one successor agent in case your first choice cannot act.
- If you name co-agents, think about whether they can act separately or must act together, and what happens if they disagree.
- Talk with your agents ahead of time so they know where your documents are and what you would want.
Ohio law gives agents real duties, including acting in good faith, within the scope of their authority and in line with the principal’s reasonable expectations. A well-drafted document makes those expectations clear.
What happens without one?
If you lose capacity without valid powers of attorney, your family may need to ask the probate court to appoint a guardian. Guardianship can involve court filings, hearings, ongoing reporting and expense, and the court, not you, decides who serves. Powers of attorney are one of the simplest ways to keep these decisions in the hands of people you have chosen.
Getting started
Gather a list of your accounts, real estate and retirement plans, and think about who you would trust to handle money and medical decisions. Decide whether you want a financial power that is effective immediately or only upon incapacity, and which, if any, of the “hot powers” you are comfortable granting. Review existing documents if they were signed many years ago, if your agent has moved or passed away, or after a marriage or divorce. Then sign the documents with the required formalities and give copies to your agents, your doctors and, where appropriate, your financial institutions.
Vincent Esquire helps Ohio families put together complete estate plans, including financial and health care powers of attorney, living wills, wills and trusts. Learn more about our estate planning services or reach out to talk through your plans.
This article is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Laws change and every situation is different, so consult an attorney about your specific circumstances. Attorney advertising.
