No one wants to think about the end of their life. There will always be things we want to do, or people we wish we had more time with. Next to that, something like estate planning seems unimportant. Isn’t it just about who gets your stuff after you die?
Short answer: No. Estate planning isn’t just about what happens when you die. It’s also about what happens while you’re very much alive.
Being alive is a wild ride, isn’t it? There are ups and downs on everyone’s journey. But what happens when your “downs” take a life-altering turn? What about the unforeseen illness? The car accident? The routine medical procedure that doesn’t go according to plan?
What happens if you are suddenly unable to communicate your own decisions to those around you? That’s when your estate plan—and specifically your power of attorney—can save the day. Here at Plan International USA, we’re usually talking about estate planning through the lens of charitable giving. Whether you’re giving to Plan or not, it’s a good idea to have an estate plan.
Powers of attorney are like the homeowners’ insurance of your estate plan. You never think about them until you need them – but if you need them, you’re really glad you have them.
What is a Power of Attorney?
A Power of Attorney is a legal document that is used to appoint someone to take care of your affairs and make decisions in your place if you are unable to do so. Powers of Attorney can be permanent or temporary, and can cover as broad or as narrow a set of circumstances as you decide. For certain topics, you can also use something called an Advance Directive. While a Power of Attorney names a person to make decisions for you in the future, an Advance Directive makes your specific wishes known, allowing you to describe what medical treatment you would like to receive in the future. For example, you can indicate that you do not want to use a machine if you are unable to breathe on your own, or that you want to donate your organs upon death.
Depending on the laws of your state, you may want to write one or more Powers of Attorney and Advance Directives. You should consult a lawyer where you live to decide which documents make the most sense for you
There are three types of decisions that you may want to cover in your documents: financial decisions, health care decisions, and end-of-life decisions. Here are some things to think about as you consider each of these areas:
Being hospitalized and unconscious for an extended period of time is obviously not a good thing. But, a worse thing would be to regain consciousness and return home, only to find that your bills hadn’t been paid in months, leaving you behind on your mortgage, your utilities disconnected due to non-payment, and the gut-wrenching realization that your health insurance premiums weren’t paid. At minimum, your Power of Attorney can authorize someone to keep things up and running while you’re away. At the most extreme, it can authorize them to liquidate your assets to pay for the best possible long-term care facility.
Health Care Decisions
Life-saving emergency medical care is almost always administered even if you are not able to provide consent. But once you are stabilized, there are often more health care decisions to be made, and you might not be able to make them. This is where a Power of Attorney for health care comes into play. Who can consult with your doctors and review your medical records? Which course of treatment is best in your circumstances? Should you be transferred to another hospital for treatment? These are just some examples of the things the person named in your Power of Attorney can manage for you while you’re unable to do so.
An Advance Directive is your opportunity to clarify your desires and beliefs for those people who may need to make decisions about your care as you near the end of your life, including your doctors. You can state your desires about life-sustaining care, the withdrawal of medical care, and organ donation, among other things.
Your Powers of Attorney are important documents, and in order to complete them you need to make some important decisions. Here are some tips for navigating that process:
1. Choose carefully! A person named in your Power of Attorney has a great deal of power! When you are making your decision, name the person you feel would do the very best job – even if that isn’t necessarily the person you think you “should” choose. You are not required to choose someone simply because they are the oldest – your oldest child, oldest sibling, etc. You are not even required to choose a family member!
2. Be realistic. This is no time to ignore the skeletons in your closet. If you have a child that hasn’t quite grown into responsibly managing money, or a brother that you know wouldn’t leave work to come to the hospital, choose someone else to name in your Power of Attorney. In a lot of cases, family is a great choice—but they don’t have to be the only choice.
3. You can choose different people for different types of decisions. If you have one sibling who lives far away, they might be in a good position to manage your financial affairs from a distance. Meanwhile, the sibling who lives close by may be in a better position to tend to your health care.
4. Don’t keep this a secret. Make sure the people you name in your documents are willing to do what you’re asking them to do. Then, once you’ve finalized your documents, either make copies for the people you’ve named, or make sure they know where and how they can get them if they need them. For example, you can provide copies to your doctor to be kept in your medical file. You should also make sure your family knows who your decision-makers are in advance. In my experience, surprised families are the ones that are most likely to have hurtful disagreements.
5. Update your documents periodically. As your circumstances change, so should your documents. Make sure you reevaluate your choices after any major life changes, like a marriage or an illness. You should review your documents at least every five years to determine if any changes are necessary.
This can be complicated. But, a little planning now can make a huge difference when you need it most.