This final piece of Wynn at Law, LLC’s short Estate Planning series looks at how you can express your wishes when you’re still alive but might not be able to communicate. Injuries and illnesses are facts of aging. Our first article in the series mentioned that fewer than one in three Americans have a Living Will. Even fewer have a Power of Attorney.
First, a bit about the difference between the two tools before we get into the types of Powers of Attorney – or POAs. Both come into play when you are not able to express your wishes. A Living Will identifies your wishes in the event of very specific health care situations. While a Health Care Power of Attorney allows someone else to make your wishes known on their behalf and make decisions in your best interests. Generally, a Health Care Power of Attorney grants broad authority to your agent to act on your behalf, whereas a Living Will gives specific direction in the event of a defined health situation. Does it hurt to have both a Living Will and a POA? That is a great question for your Estate Planning Lawyer (a case-by-case answer you cannot get online), but in general, no.
Two Powers of Attorney
The ability to have someone act on your behalf via a POA can be limited, rather than just giving your designee – or agent – act unilaterally for you. The POA is usually viewed as either a Health Care POA or Financial POA.
Health Care POA: This document gives an individual the power to make medical decisions for you if you become incapacitated. These decisions can include institutional admission, life support, or surgery.
Financial POA: This document designates an agent to manage your finances if you become incapacitated or are unable to make informed decisions for yourself. This is also important if a person can still make decisions, but cannot speak or physically sign his or her name. Rather than adding an agent as a co-owner of an account, exposing that account to the agent’s debts, a POA allows them to sign checks you direct them to sign.
The stats favor using a POA
Not many Wynn at Law, LLC clients will legitimately say they enjoy the reality of Estate Planning. You are, after all, planning for the end of life. Your life. It’s potentially a warm, caring topic that gets overshadowed by morbid stigma about death and dying. The disability part of the conversation is even more difficult because, by nature, we don’t want to think about being alive but incapable of acting for ourselves.
The statistics say we need to pay more attention to POAs. The Administration on Aging’s 2018 Profile of Older Americans concluded that 62 percent of adults over 65 had two or more chronic conditions. And it isn’t just a concern to wise up to once you retire. More than one in four of today’s 20-year-olds can expect to be disabled before they reach retirement according to the Social Security Administration. An expertly drafted POA can help prevent incapacitation from turning into an emotional and financial family tragedy.