Estate Planning: Living Will & Power of Attorney

Health care directives are instructions given to allow for a person’s wishes to be carried out if they are not able to speak for themselves.  There are two common types of health care directives:  a living will and a durable power of attorney.

Living Will

A living will is a legal document in many states that allows a person to state their vishes in advance pertaining to life-sustaining medical procedures and whether or not they should be used to continue a person’s life when there is no chance for the person to experience a reasonable recovery.

There are many different reasons a person considers a living will:

  • The belief that a person has the right to control medical decisions pertaining to their care, including but not limited to the right to refuse or withdraw life-sustaining treatment.
  • A concern pertaining to the suffering and loss of dignity that can happen when life-sustaining means are used to prolong a death that is inevitable.
  • Keeping a family the emotional pain from having to make such a difficult decision.
  • Relieving a hospital’s or doctor’s fear of a lawsuit in withholding or withdrawing medical treatment that leads to death.
  • For organ donors, language concerning this type of life-saving gift can be included in a living will.

How to Implement a Living Will

State statutes determine the validity of a living will.  The requirements that are usually included in the document include that the document be:  in writing, dated, signed, and witnessed by two people not related to the person named in the living will or heirs of their estate.  

Doctors or hospital employees are usually not an acceptable as a witness.  Talking to the family doctor and attorney before and after a living will is drafted is advisable.  In addition, a copy of a living will should be given to a person’s primary doctor and attorney.  A living will can be rescinded at any time through signing a notarized revocation of the document and destroying any and all copies of the document.  

Power of Attorney

When a person authorizes another person to act on their behalf, a power of attorney document is needed.  The authorizing person (the principal) provides the attorney-in-fact a written document that can be authorized three different ways.

  • General Power of Attorney – This type of authority is very broad.  Essentially, the attorney-in-fact is given the same legal authority as held by the principal.  Such powers as buying and selling assets, filing tax returns, and making gifts can be exercised by the attorney-in-fact on behalf of the principal.
  • Special Power of Attorney – This limited authority is granted to the attorney-in-fact for specific tasks or as specifically defined in the document.  
  • Durable Power of Attorney – This is the only type of power of attorney used for a person who is deemed incompetent or incapacitated.  A power of attorney statues can move from a general or special power of attorney to a durable power of attorney immediately or effective when the principal becomes incapacitated at a later date.

When to Consider a Durable Power of Attorney

If a person believes that at some point in the future they will become incapacitated, a durable power of attorney can be particularly useful.  

  • Estate Planning/Management – Authority is given to the attorney-in-fact who implements an estate plan and manages the principal’s estate while the principal is incompetent or incapacitated.
  • Daily Living – An attorney-in-fact can be given a durable power of attorney in order to manage such issues as living arrangements or paying the bills.

Living Will Versus Power of Attorney

Toward the end of a person’s live, they may need help with finances, medical care, or communication pertaining to medical wishes to family and doctors.  A living will can give direction to a health care provider as to a person’s wishes concerning their medical care if they become unable to relay those wishes.  

A power of attorney can be given to someone for health care or finances in order for that person to act on a person’s behalf. A living will does not appoint someone to make health care or financial decision.  A power of attorney must be completed in order for that to happen.  Those who have neither are at the mercy of the medical professionals or financial institutions if they become incapacitated.

A durable power of attorney for health care is important when future health decisions may not be completely known as to specify in a living will.  If a person knows the wishes of another, then they must act in that manner.  However, if a person’s wishes are not known, the durable power of attorney then makes a decision based on the person’s best interests.

With a durable power of attorney for finances, a broad or narrow authority can be given to an individual to handle the finances if a person becomes incapacitated.  A person can name a different person to act on their behalf for health care and finances.

Since a living will, durable power of attorney for health care, and durable power of attorney for finances serve three distinct purposes, a person can have all three in place.  A living will takes precedent over a durable power of attorney for health care due to a person’s capability to make decisions for themselves.

All of these documents must be drawn up legally.  It is advised that a person hire a trusted attorney or financial advisor to help them complete these important documents.  

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