Healthcare Directive /POA
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 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.
Instruction 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.
Proxy Directive
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.
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?
Avoiding Guardianship
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