San Diego Estate Planning Lawyer Blog
There is an important distinction in estate planning between a power of attorney for financial affairs and an advance directive, also known as a power of attorney for health care. Both documents fulfill a similar purpose – appointing an agent to act on your behalf when you are incapable of doing so for any reason. In many cases, people choose to appoint the same person as agent for both purposes.
Court Invalidates Arbitration Agreement Signed Under Non-Healthcare Power of Attorney
A power of attorney and an advance health care directive are not interchangeable. When it comes to making “health care decisions” for you, a person holding only your power of attorney for financial affairs is powerless to act. Of course, defining what constitutes a “health care decision” is not always so clear.
For example, a state appeals court in Sacramento recently examined whether a power of attorney for financial affairs, referred to here as a “personal care POA,” authorized an agent to sign a nursing home admission form that contained a binding arbitration clause. Such clauses are routinely inserted into admission agreements by nursing homes and other health care facilities to forestall potential litigation in the event they commit malpractice or negligence against a resident.
In this case, a now-deceased woman (the decedent) signed an advance health care directive naming her niece as agent. Separately, the decedent named her niece and her sister as co-agents under her personal care POA. Each agent had authority under the personal care POA to make decisions for the decedent regarding “personal and family maintenance” and “claims and litigation.” But the personal care POA expressly did not apply to “medical and other health-care decisions,” which remained subject to the advance directive.
The decedent lived with her sister for several years, but when the decedent’s mental health began to deteriorate, the sister decided to admit her to a nursing home, the defendant in this case. The sister signed the admission forms on the decedent’s behalf, which included a binding arbitration clause. The niece, who was still the agent named under the decedent’s advance directive, was never consulted or involved in this decision.
The decedent died while under the defendant’s care. The sister and the niece then sued the defendant for elder abuse, fraud, and negligent infliction of emotional distress. The defendant moved to compel arbitration.
The trial court held that the arbitration agreement was invalid since it constituted a “health care decision” that exceeded the sister’s legal authority under the personal care POA. The defendant appealed, but in a published opinion, the California Third District Court of Appeals affirmed the trial court’s ruling.
The crux of the defendant’s argument was that it was a “residential” facility that was “not primarily medically oriented.” But the Third District noted that residential facilities often “provide a level of care that goes beyond mere personal care authorized” by a power of attorney, “including some forms of medical care.” That was the case here.
Get Help From a California Estate Planning Attorney
Every California resident should have both a power of attorney for personal care and an advance directive for health care. It is critical to ensure the people acting in your name have the proper legal authority. If you need assistance from a qualified San Diego estate planning lawyer, contact the Law Office of Scott C. Soady today.