We spend most of our life in accumulating wealth and assets, taking care of our loved ones, fulfilling their wishes, and securing their future, however, in between all these we forget ourselves completely. At a certain point of time, we all need someone to take care of us it may be due to severe illness, an accident or after a certain age when we will not be able to do that for ourselves.
Estate Planning-
Hence, apart from thinking about our loved ones and our estate, we must think about ourselves like what will happen if we ever become disabling to take care of our health and in such a situation who will be responsible for our financial and healthcare matters.
For such circumstances, it is very important that you have your plan ready by establishing the estate planning documents such as a living will and a power of attorney. These documents ensure that you will get the medical treatment of your choice and your financial matters will be handled like the way you want by giving someone the authority to act on your behalf. Here we have explained both the terms for you so that you could have a glance and understand them better.
Difference between Living Will & Power Of Attorney-
Living Will: A Living Will that is also known as an advance health care directive, is a legal document that states your healthcare wishes i.e. preference for medical treatment you would like to receive in the event when you won’t be able to express them by yourself due to incapacity caused due to physical or mental illness and injury due to accident. The document directs your loved ones, family members and doctors regarding your end-of-life preferences such as if you want life-prolonging procedures like artificial respiration/hydration, at what extent you would like to discontinue your treatment, how you would like to end your life and your preferred location to live your last days.
Power of Attorney: A Power of Attorney also referred to as POA is a legal document through which you can entitle someone to act on your behalf and make decisions for you. The person so designated is called an agent and can be someone who is your trustworthy like your spouse, close friend or family member. However, you must talk with the designated person and let them know about the responsibility entitled upon them and discuss your wishes with them so that they would know what exactly your wishes are. The POA is of following types:
1. Limited POA: In a limited POA, the designated agent can be limited to represent you at some specific task or transaction and is active only while you are alive and in full perceptional privilege. After completion of the said task or your demise, the POA will be ended and the agent will no longer be able to represent you.
2. General POA: This type of POA covers almost all activities where the agent will be authorized to represent you there. You can also list out the broad areas of responsibility. However, it gets revoked in case of your incapacity and death.
3. Springing POA: If you specify your POA to be effective at a scheduled date or event, it is said to be springing POA as they spring to action when the said date or event occurs
4. Durable POA: This is similar to the general POA except for the fact that it remains effective in case of your incapacity as well. The agent so assigned will thus be able to enact on your behalf and make decisions. After your recovery from illness or your death, the POA relationship ends as well.
Hence, it is always advised to make a durable power of attorney so that your appointed agent can make decisions on your behalf at the time of your incapacity. There are two types of durable POA:
1. Durable Power of Attorney for Healthcare: Also called a medical power of attorney provides authority to the agent of your choice to deal in your healthcare issues when you are unable to do so for yourself. Apart from appointing the agent, you can also specify your healthcare preferences which your agent will inform your doctors in case of your disability.
2. Durable Power of Attorney for Finances: This POA authorizes your chosen and appointed agent to handle all your financial issues on your behalf if you become disabled to do so yourself. The agent appointed in the durable POA for finance can be the same or different from the agent appointed in the durable POA for healthcare. However, it is advised to think carefully and limit these powers accordingly. POA can be drafted to be very broad and include all types of situations, or be very limited and applicable only to certain specified cases such as managing overall investments, receive and dispose payments, filing tax returns, depositing checks, etc.
Being your primary healthcare directive, the document must be as specific as possible. However, as the living will, can’t cover every possibility and there comes the durable power of attorney. A living will differ from the medical power of attorney as the former set out your wishes specifically whereas the latter allows you to appoint someone to act on your behalf and make your healthcare decisions for you.
By drafting these documents, you can avoid the court intervention in this matter, where a judge who does not know you would decide about your healthcare and financial matters, your family and doctors will know that they are following your wishes, and you will have peace of mind as well.
