Many people when confronted with serious questions related to their health, financial status, and general management of their day-to-day affairs, are faced with deciding whether to create a living will and/or a power of attorney. It's important to understand the differences between these important documents and understand scenarios in which each would be beneficial.
Power of Attorney
Most people use a power of attorney (POA) to give a person, traditionally a family member or close friend, the authority to make end-of-life care decisions should the principal, or person signing the power of attorney, become incapacitated or unable to make such decisions. For instance, a power of attorney is useful if you are unable to make your own healthcare decisions.
Some people think of powers of attorney only useful for those that are medically incapacitated, but there are a number of other reasons a person may need a power of attorney. This type of document can be used for those that simply want another person to act on their behalf. For example:
- A power of attorney can be helpful for college students, as it grants their parents or guardians the authority to act on their behalf for health or financial needs should they be unable to for any reason.
- Some financial advisors suggest that business owners create a power of attorney that would go into effective if they were to become unable to handle the day-to-day operations of their business. This could be useful in the case of a family emergency or overseas travel, for instance.
Different POA Types
Three common power of attorney types are:
Limited Power of Attorney
A limited power of attorney permits an agent to act on your behalf for a specific purpose or for a limited amount of time. For example, the principal may be preparing for a risky surgery and is expected to be incapacitated or unable to make serious decisions during that time. Or, perhaps you are a business owner on a two-month nature hiatus. This situation would be ideal for creating a limited power of attorney. This type of POA ends on a certain date or under particular conditions specified by the principal.
Durable Power of Attorney for Healthcare
A durable healthcare power of attorney gives your agent broad range to make day-to-day decisions on your behalf. For instance, a durable power of attorney for healthcare would be useful for an aging person with Alzheimer's, or perhaps someone who has suffered from a traumatic brain injury. Because individuals in these situations are indefinitely incapable of making their own healthcare decisions, the use of a broad durable power of attorney for healthcare is ideal. These legal documents are effective until revoked by the principal in writing.
Durable Power of Attorney for Finances
Rather, a financial power of attorney permits an agent to make financial decisions on behalf of the principal during a period of incapacitation. These duties may include checking account balances, paying bills, selling property, and making investment decisions. Some banks may require the principal and agent to present the durable power of attorney and sign signature cards so that the agent can perform basic banking duties in the principal's absence.
A durable power of attorney for finances may be an ideal situation for someone who is still capable of making their own healthcare decisions, but unable to make financial decisions for whatever reason. For instance, this could be appropriate for a prison inmate who cannot regularly transact business at a bank . A financial power of attorney may also be good for someone who frequently travels overseas and does not have a particular return date. The durable financial power of attorney will afford the agent to the opportunity to pay the traveler's rent or mortgage, pay their bills, and generally handle the traveler's business while abroad.
The agent identified as the financial power of attorney can be the same person identified as the healthcare power of attorney, if the principal has both a healthcare and financial power of attorney, or someone else entirely. This kind of power of attorney can be revoked at any time. The principal need only put the revocation in writing.
Drafting a POA
While the laws vary from state to state, generally you, the principal, are required to sign these documents. It's also a good idea to have them notarized in the event the validity of the documents are ever questioned. Depending on the state, you may also need to have one or two witnesses.
If you are not a legal expert, seek out the assistance of a qualified trusts and estates attorney in your state to assist you. Many state bars board certify attorneys in the area of trusts and estates after a certain number of years of practice and a satisfactory score on a certification exam. You can find board certified lawyers in your state by searching the attorney directory of your state's bar association website.
If you decide to draft the documents yourself, check the attorney general's website in the state that you live for assistance on legal requirements and which form will best fit your needs. You may also be able to find a sample power of attorney that comports with your state's requirements on the state bar website or websites like Legal Zoom. Keep in mind that what may be valid in one state may not be valid in another.
A living will sets out your wishes regarding your care in the event you become severely injured or terminally ill. Generally, a living will is reserved for those end-of-life healthcare decisions and it describes in detail your deathbed wishes. While a living will is appropriate for anyone over the legal limit (18 years of age in most states) to assist in planning for the unexpected, a living will is an especially useful legal tool for elderly. For example, a living will is ideal for someone who wants to ensure that their end-of-life care decisions are honored.
Key Items to Address
Your living will can and should address medical options and life sustaining treatments, such as artificial respiration, life support, do not resuscitate orders, nutrition or hydration withholding, as well as what types of discomfort and pain medications you are to be given. A living will should also state how and where you'd like to live out your last days, i.e. whether you prefer to live your final days at home or in the hospital, funeral arrangement wishes, and your preferences for disposition of the body and organ donation. If you become incapacitated, your physicians and loved ones will look to your living will for guidance.
How a Living Will Differs from POA
Though a power of attorney and a living will may appear to do the same thing in some cases, they are quite different. Unlike a power of attorney, which gives another person the authority to make decisions in your best interest, a living will sets out your decisions without giving someone else those rights. Therefore, it gives you the peace of mind in knowing that your wishes will be respected in the event you are unable to verbalize your preferences. This does not mean that living wills are without controversy, however. Though a living will frees your family and loved ones from having to make tough end-of-life decisions for you, if you have not elected someone who is sure to carry out your wishes, the living will may be contested.
Have the Talk
Before taking on the task of drafting your living will, talk with your physician to ensure you understand what your healthcare choices would mean. It's also important to discuss your healthcare choices with your family and loved ones. While these discussions are sometimes difficult to have, it affords your loved ones an opportunity to ask questions, and it allows you to determine whether or not they are willing to carry out your wishes.
Drafting a Living Will
Just like with powers of attorney, the laws necessary to execute a living will vary from state to state. Therefore, you should seek out the advice of a qualified trusts and estates attorney. If you decide to draft the document yourself, generally, you are required to sign the document and it's a good idea to have it notarized in the event its validity is ever questioned. Depending on the state, you may also need to have one or two witnesses.
An Important Decision
Deciding whether - and how - to execute a power of attorney or a living will (or both) is an important choice. Determining which loved one(s) will act on your behalf and either carry out your wishes or act in your best interest takes a bit of reflection and is not a decision that should be made lightly.
Remember that generally a power of attorney authorizes another individual to make decisions on your behalf, while a living will outlines wishes that you expect to be carried out in the event you are incapacitated. The requirements for these legal documents vary from state to state, so be sure to check-in with a lawyer who is qualified in your state to draft these types of documents. If you don't already have an attorney, check with your state's bar website for assistance.