Healthcare Directive / POA
Healthcare Directive and Power of Attorney
Like a will, advance directive for healthcare and power of attorney are the cornerstones of an estate plan. Advance directives and powers of attorney help carry out your health and financial wishes if you lose capacity. Without an advance directive for healthcare and power of attorney, your fate may be controlled by a judge or others who don’t even know you. Provided that you have trustworthy family or friends, you need both an advance directive for healthcare and a power of attorney
Advance Directive for Health Care
Your advance directive for healthcare explains your wishes on end of life and who you want to direct your health care if you lose the ability to make or communicate important decisions. It becomes effective in the event you are unable to communicate your own wishes, e.g. if you are in a coma, develop dementia, or suffer a stroke or other mental impairment.
An advance directive for healthcare has two components – an instruction directive, and proxy directive.
An instruction directive (a/k/a “living will”) is just what the name implies– a directive to healthcare providers regarding your care especially at end of life. For example, if you had terminal illness or were permanently unconscious with no realistic chance of recovery, would you prefer to receive life support or let nature takes it course? Without an instruction directive decision makers might have to guess your wishes.
An instruction directive also can state preferences regarding pain management, medication, palliative care, organ donation, experimental treatment, religious strictures on treatments, and other aspects of your healthcare.
A proxy directive serves as a healthcare power of attorney. In other words, it appoints a healthcare representative to make healthcare decisions that you can’t make for yourself. Without a proxy directive key medical decisions might be made for you by a court or a guardian appointed by the court. In addition, relatives may fight over your care. Appointing a healthcare representative can make things much easier for your loved ones– especially if you discuss your wishes with your healthcare representative in advance.
An advance directive for healthcare also can authorize your representative to obtain your medical information. This is important because otherwise doctors may refuse to release medical information to your loved ones, citing HIPAA’s patient privacy rule.
Power of Attorney (POA)
A power of attorney appoints family, friends, or professionals as your agent to manage finances in case your abilities decline. An agent under power of attorney sometimes is called an attorney-in-fact. The power of attorney agent acts as your fiduciary to must manage your finances prudently for your benefit.
Power of attorney allows your agent to pay your bills, manage your finances, pursue legal claims, and conduct business transactions on your behalf. You can make a power of attorney as broad or as narrow as you wish.
A power of attorney can be an essential tool in both in tax and Medicaid planning. If your capacity becomes impaired, your savings may have to be spent needlessly to fund long term care unless you have a high-quality power of attorney that contains special terms. Off the shelf form powers of attorney often do not have terms required by law when a power of attorney is to be used for tax or Medicaid planning.
While a power of attorney can be limited to take effect only if you become disabled, that can make it much harder to use. In addition, if you don’t trust the agent you appoint in a power of attorney enough to make the power of attorney effective even though you still have full capacity, why on earth would you give that person broad authority over your finances while you are too impaired to handle them?
A well drafted advance directive for healthcare and power of attorney can help you retain autonomy if your mental capacity declines. These instruments can clarify your wishes and appoint an agent to carry out your wishes when you cannot.
If you lose the ability to manage your healthcare or finances but don’t have advance directive for healthcare and power of attorney in place, there is little option but for a court to appoint a guardian over you.
A guardian does not have to follow your wishes and may be someone you wouldn’t want or don’t even know. In contrast an agent under advance directive for healthcare or power of attorney must follow the instructions you set forth in your documents, and you define the agent’s powers. A guardian has broad power over your life and affairs, and the guardian’s powers are set by the court.
In short, you have authority over an agent under advance directive for healthcare or power of attorney, but a guardian holds authority over you. Moreover a guardianship proceeding can be expensive and intrusive, and involves doctor examinations, a court-appointed attorney and a court hearing.
For these reasons, we find most people welcome the opportunity to name an agent instead of relying on the courts to appoint a guardian. But if you don’t have advance directive for healthcare and power of attorney and your mental capacity declines, there may be no alternative to a guardianship.
Advance directive for healthcare and power of attorney can save your family a lot of expense and anguish, but once you lose capacity it is too late to execute these documents. That’s why it’s important to create a advance directive for healthcare and power of attorney while you’re healthy. Typically, we can craft advance directive for healthcare and power of attorney without substantial additional cost when we prepare a will.