At the start of their estate planning journey, most people are often surprised to discover that they need more than just a will. While a will is important, it just scratches the surface of all the legal protections you can put in place to safeguard your future. An estate plan isn't just about what happens after you die. It is also about how you intend to spend your final days or years. An estate planning attorney is likely to urge you to discuss a power of attorney or a living will.
Veitengruber Law is an experienced estate planning attorney in Monmouth County. We have over a decade of experience crafting personalized estate plans designed to protect our clients and offer peace of mind. The future is uncertain, but the multitude of options available to you as you devise an estate plan can help you prepare for the future no matter what it has in store. However, all these options can be confusing to those unfamiliar with estate law. What is a power of attorney? What is a living will? Do I need one, or both, or neither?
Here, we take a deep dive into examining these two critical tools, exploring how they function and which option is best suited for your circumstances.
What is a Power of Attorney (POA)?
A POA is a legal document that appoints a trusted person to make decisions on your behalf if you are unable to do so yourself. There are two primary types of POAs in estate planning, serving distinct functions: medical and financial. A medical POA gives someone the authority to make healthcare decisions on your behalf. A financial POA grants someone the ability to manage your financial accounts, pay your bills, and make financial decisions if you are incapacitated.
You can also have a durable POA or a regular, non-durable POA. A durable POA remains in place even after you are incapacitated. A POA can be as specific as you want it to be, and you can have a joint or dual POA in which two or more people are allowed to act together to manage your affairs.
What is a Living Will?
A living will is also sometimes referred to as an advanced directive. This legal document will outline your healthcare preferences if you cannot make these decisions at some point in the future. You can indicate your wishes for different medical treatments like life support, resuscitation, tube feeding, palliative care, and organ donation, among other things. By documenting your preferences regarding these treatments, your medical team can ensure that they follow your wishes, even if you are unable to voice them.
Key Differences
These essential estate planning tools complement each other in providing comprehensive coverage for anything life throws at you. However, there are a few important differences that you should be aware of when creating an effective estate plan.
1. Purpose and Scope
A living will does not empower anyone to make choices on your behalf. Instead, it empowers you to have your choices heard even if you are unable to communicate or are in mental decline. A living will only covers your preferences related to medical treatments and healthcare. On the other hand, a POA legally empowers someone you trust to make broad decisions about your finances, healthcare, or both. You are granting this person, or "agent," permission to have the final call on how things should be handled if you can no longer make those decisions yourself. A POA has a much broader scope than a living will.
2. Activation Criteria
A living will goes into effect only if you are incapacitated and cannot communicate. Medical professionals will follow the directives in your living will to provide treatment through the end of your life or until you are no longer incapacitated. A POA will be activated or deactivated depending on the criteria listed in the POA. For example, if you have a durable financial POA, it will go into effect if you are no longer able to make your own decisions financially (from mental deterioration or medical incapacitation). A POA is much more specific in the instances in which it can be activated.
What are the benefits and drawbacks of a living will?
A living will ensures your wishes are followed even if you are not mentally or physically able to make a choice. Advanced directives, such as living wills, can ensure a more consistent healthcare experience and stricter adherence to a patient's end-of-life preferences. Without a living will, someone else will make decisions on your behalf. A living will can also reduce the burden on your family and loved ones. Without a clear directive in place, those closest to you may have to make difficult and emotional choices about your end-of-life care. This can lead to conflict and heartbreak if loved ones cannot agree on a path forward for your treatment. A living will can give loved ones the peace of mind that they are following your wishes.
However, there are some limitations to living wills. Living wills that lack specificity can lead to misinterpretations by medical professionals. For example, "no heroic measures" can mean different things to different people. A living will must also be updated with an individual's most recent health conditions. If your condition or treatment preferences change, it is essential to revise your living will as soon as possible to ensure that your treatment aligns with your current wishes.
What are the benefits and drawbacks of a POA?
POAs are flexible, versatile legal tools that cover a wide scope of issues with one document. A Power of Attorney (POA) can authorize someone to make all of your legal, financial, and medical decisions. This enables you to plan for various scenarios and allows your agent to adapt to diverse needs. This can ensure comprehensive management of all your personal affairs. You also get to choose your agent, ensuring it is someone you trust and who will have your best interests at heart. Choosing this person yourself is often preferable to someone you do not trust making these decisions on your behalf.
The biggest word of caution with POAs is choosing an agent that you can trust with your legal, financial, and medical affairs. Because POAs are so flexible, in the hands of someone with ulterior motives, they can lead to overreach. It is critical to vet your potential agents to ensure they are responsible, genuine, and capable.
Do you need a Power of Attorney (POA) or a Living Will? The answer is likely: Both!
These documents work together to create a comprehensive estate plan that covers all possible scenarios. Veitengruber Law can help you create an estate plan tailored to your specific needs and goals. We work with clients to establish explicit and detailed documentation that clearly communicates their wishes. Comprehensive estate plans that include a living will and a POA provide peace of mind for you and your loved ones.
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