It could happen at any time. You are unexpectedly struck by an illness or injury that leaves you unconscious or otherwise unable to communicate. Your doctors are unaware of your wishes regarding life-saving measures, and they can’t rely on your loved ones for medical decisions because federal law prevents them disclosing details about your condition. Or perhaps your incapacity is prolonged, your mortgage and other bills are due, and your loved one don’t have access to your bank account to make payments. These scenarios are not just possible, they happen frequently. But they don’t have to happen to you.
Proactive estate planning can prevent these scenarios from playing out. You can maintain control of your finances and medical decisions, even if you are unable to communicate, by having a set of documents prepared that are ancillary to your will or trust. These standalone documents can be distributed to whomever requires them in the event of your unforeseen incapacity, including doctors, hospitals, banks, and other financial institutions.
Durable power of attorney
A power of attorney is a legal document in which you name another person (called an “agent”) to act on your behalf. A traditional power of attorney terminates upon your disability or passing, whereas a “durable” power of attorney takes effect immediately and remains effective if you become ill and are unable to make decisions on your own. You can give your appointed agent broad or limited management powers, including handling business and financial affairs, purchasing and selling property, and many other decisions. It is important to select a trusted loved one or advisor to act as your agent, as the person you designate must act in your best financial interests and according to your wishes. Without a power of attorney, a court has the authority to determine who acts on your behalf, not you.
Durable power of attorney for healthcare
Also known as a “medical power of attorney” or “healthcare proxy,” the durable power of attorney for healthcare is a document that enables a trusted family member or friend to make decisions about your medical care if you are unable to do so. It can only be used if you are incapacitated, as determined by your physician. The person you choose for this role should have a full understanding of your medical situation, your wishes with respect to your health and treatment, and be able to make difficult decisions. This document can be invaluable for avoiding family conflicts if you are unable to make decisions on your own.
Directive to physicians (living will)
This document is a statement of your wishes for the kind of life-sustaining medical intervention you want or don’t want if you are unable to communicate and have become terminally ill or suffering from an irreversible condition, as determined by your physician. No agent is appointed, so no one else has authority to act on your behalf in this situation. A living will is the only way to convey in advance your personal preferences for life support measures, life-saving procedures, and long-term care. Everyone should have a living will, but it is even more critical if you are older, have a terminal illness, or are undergoing major surgery.
A document similar to the living will is the out-of-hospital do-not-resuscitate (DNR) order. Like the living will, it states your wishes with respect to life-saving measures, but it must be signed by your physician and specifically applies only for certain procedures during a medical emergency where EMS or emergency room personnel, nursing home staff, or other non-hospital care is provided.
HIPAA authorization form
The Health Insurance Portability and Accountability Act (HIPAA) was enacted in 1996 and included provisions intended to secure the privacy of health data, including medical records. Simply put, HIPAA says no one is allowed access to your medical information without your consent. However, there may be times when a family member or close friend needs this information and you are not able to give consent, as you’ve become unexpectedly incapacitated. Without your consent, your family would be forced to go through the legal process to obtain these records, which can be expensive and untimely. By signing a HIPAA authorization, you allow a health care agent of your choice to have access to your medical records and other medical information in this situation. This document, coupled with the medical power of attorney, is the foundation for ensuring your best interests are considered when you are unable to make healthcare decisions on your own.
Declaration of guardian for minor children
A declaration of guardian names a trusted loved one to be the guardian of your minor children in the event of your incapacity or passing. This document is particularly relevant when you choose a living trust as your primary estate plan vehicle, since it will likely not include this provision. But even if such a declaration is included in your will, it’s nice to have a separate document available to distribute as needed so the contents of your complete will are not unnecessarily disclosed.
So don’t delay. You may never need these helpful tools, but if you do need them and they don’t exist, it can mean a world of difference in how your loved ones are able to navigate your incapacity.