Without the proper legal, financial, and healthcare protection, you may be at risk should you become incapable of directing your affairs. Advance directives are important healthcare planning tools that can set forth your preferences if an accident or illness impairs your ability to make decisions.
Let’s highlight three tools to help you prepare for the future and protect your health and finances: a durable power of attorney, health care proxy, and living will.
Durable Power of Attorney
A durable power of attorney grants authority to another person to make legal and financial decisions on your behalf, even if you become mentally incapacitated. The powers granted can range from broad to limited in scope.
With a durable power of attorney, your designee can assist you with decisions regarding your financial and tax situation, investments, insurance transactions, government benefits, estate plans, retirement plans, and business interests.
Without such legal protection, court intervention (with the accompanying time and expense) may be necessary. A durable power of attorney is generally inexpensive and easy to implement.
Healthcare Proxies
While a durable power of attorney grants authority to another person to make financial decisions, a healthcare proxy (also known as a medical durable power of attorney or a durable power of attorney for health care) appoints someone to make healthcare decisions on your behalf.
This directive only takes effect if you are unable to direct your medical care. A healthcare proxy does not enable the designated person to make financial, legal, or business decisions on your behalf, only medical decisions. In addition to a healthcare proxy, it is also common to have a living will.
Living Wills
A living will generally allows you to state your preferences regarding the giving or withholding of life-sustaining medical treatment. In most states, you must have a terminal condition, be in a persistent vegetative state, or be permanently unconscious before life support can be withdrawn. The definition of these terms and the medical conditions covered may vary from state to state.
It is important not to confuse a living will with a testamentary will, which provides for the disposition of property upon death. One is never a substitute for the other.
Federal law (the Patient Self-Determination Act of 1991) requires hospitals to inform patients about advance directives. With healthcare proxies and living wills, you are able to guide your future medical care, even if you become unable to make informed decisions.
To help ensure your legal and financial wishes are also met, legally appoint someone you trust with a durable power of attorney.
If you have more questions about using healthcare planning to protect yourself and your finances, reach out to our team using the form below.
Adapted from: “The Power of Legal Protection.” FMeX. 2015. https://abm.emaplan.com/ABM/MediaServe/MediaLink?token=7426ac2e719c4724a567012765b4ef2a