Protect Your Wishes with a Durable Power of Attorney, Living Will and Healthcare Directive


A man paying attention and listeningIn addition to a will and appropriate trust planning, a thorough estate plan has several other key provisions to ensure that your decisions are carried out on your behalf if you are unable to do so. Typically, this is done through a durable power of attorney for general or business purposes, along with a medical power of attorney and healthcare directive. The former bestows the power to make decisions about your financial affairs if you are unable to do so. The latter does the same for healthcare decisions.

Unlike your will, which directs the distribution of assets following your death, these documents are applicable only during your lifetime in the event you become unable to make these decisions for yourself. Here are some answers to frequently asked questions about these important documents.

What is a power of attorney?

In general, a power of attorney is a document that designates someone to act on your behalf, also called an attorney-in-fact or an agent, to manage your day-to-day financial or personal affairs. If the power of attorney contains language describing it as “durable,” it is considered a “durable power of attorney,” according to the law.

This means that the document will remain in effect in the event you become incapacitated or disabled. Your durable power of attorney may be effective immediately or you may choose a specific date or event, such as your incapacity, at some point in the future.

Since your agent may be involved in your financial and personal affairs, it’s important to name someone you trust. Any decisions he or she makes on your behalf are legally binding on you. In other words, you’re held responsible as if you you’d made those commitments yourself. States have different laws regarding who may be appointed as your agent, so check the requirements in your state before making a final decision.

What is a living will, healthcare directive, or medical power of attorney?

Some people have strong preferences about medical care, such as administration of certain life-sustaining procedures or life support systems. A healthcare directive, or living will, provides general healthcare instructions to your doctor or treating physician if you become incapacitated and are unable to make such decisions for yourself.

A medical power of attorney, which your attorney may draft as part of your healthcare directive or living will, names an attorney-in-fact, sometimes called an agent or a healthcare proxy. This person is authorized to discuss your treatment with medical care providers and to make healthcare decisions for you that are consistent with your wishes.

The people you designate to act for you in making medical decisions may be different than those you designate in a durable power of attorney to act for you in making financial or business decisions.

If I have a durable power of attorney, why do I need a living will or healthcare directive?

In almost all cases, it’s advisable to use a living will or healthcare directive in addition to a durable power of attorney. A durable power of attorney provides your attorney-in-fact the authority needed to act on your behalf for general or financial purposes and gives the person you appoint a number of ways in which he or she can legally act on your behalf. These powers can include the ability to pay your bills, handle your bank and investment accounts, make gifts of your property, or refuse any gift made to you or for your benefit.

In some instances, your attorney-in-fact can change the beneficiary designation on an asset or designate one or more additional or substitute attorneys-in-fact. By contrast, a living will or healthcare directive focus specifically on powers associated with your care and medical needs.

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