Do you know who will make important decisions if you cannot?
You probably already know that an estate plan can help you plan what you want to happen after your death. However, many people do not realize that an estate plan also allows you to plan what you want to happen while you are alive.
Durable powers of attorney and living wills are specific tools that can help protect you and your assets if you ever become incapacitated. Understanding what each of these tools offers can help you make the most of your estate plan.
Durable powers of attorney name alternate decision-makers
A power of attorney is a document that allows you to name someone of your choice to make decisions on your behalf. You can choose to create a power of attorney for financial matters or health care matters, but many people benefit from having both types of power of attorney.
The person you choose to handle your financial matters, called your financial agent, may be responsible for paying your bills, managing your property and handling your banking, among other tasks. The person you choose to handle your health care matters, called your health care agent, may be responsible for the type of medical treatment you do or do not receive while you are incapacitated.
A living will records your wishes regarding medical care
A living will is a document that allows you to record your wishes for or against certain types of medical treatment. This record of your wishes can help your doctors understand your wishes in situations when you might otherwise be unable to communicate them.
Often, people use a living will to note that they wish to avoid treatment like breathing machines or kidney dialysis. However, it can also be used to note that you would like to pain free at the end of your life.
Typically, a living will and power of attorney for health care are combined into one document. This can be advantageous because the two overlap in a complementary way. Your health care agent will not be able to make choices for you that conflict with the wishes you recorded in your living will. However, your agent may make decisions for you in circumstances you may have overlooked when writing your living will.
Some estate planning tools are great for helping you plan what should happen after your death, but other tools are available to help you plan for possible incapacity. A thorough estate plan should address both possible circumstances because there is no way to know what the future may hold.