We spend a lot of time talking with clients about what will happen after they’re gone. We help them think through where their assets will go, who will handle their estate-related decisions, and who will take care of their children/pets if something happens to them. 

One of the most important steps someone can take in their end-of-life and estate planning is to grant Powers of Attorney and set up Healthcare Directives. Here’s an overview:

What are Powers of Attorney (POA)?

There are three types, and these are the only estate documents/roles that come into play while someone is alive–but incapacitated in some way. Here are the types:

1. Durable Power of Attorney for Legal & Financial Matters (or “Financial Power of Attorney”)

This document allows a person (the “principal”) to delegate to another person (the “attorney-in-fact”) the power to make decisions regarding their finances, bank accounts, and other assets. It can be revoked at any time and its power automatically ends upon the death of the principal. In some states, a “Springing” Power of Attorney may be put into place so that the document is only effective in case of the incapacity of the individual.

2. Power of Attorney for Healthcare (or “Living Will”) 

This delegates the power to make healthcare decisions on someone’s behalf if he or she is unable to make such decisions. It permits the principal to provide instructions regarding medical treatment: basic or advanced medical procedures, giving or withholding food and fluids, and the use of life-prolonging treatment. 

3. Guardian or Conservator 

If an individual does not delegate Power of Attorney for Healthcare and then becomes incapacitated–i.e. becomes incapable of making responsible decisions due to a mental disability or condition–a court proceeding may appoint someone to make healthcare or financial decisions for the individual. This is rare, but called a “guardian” (for healthcare decisions) or “conservator” (for financial decisions). 

What should you know about Power of Attorney (POA) documents? 

• They’re separate documents that are typically drafted by an attorney–while someone is of sound mind–and then notarized or witnessed. 
• They’re powerful legal documents! The Durable Power of Attorney document should be kept private, but the Guardianship Directive and Healthcare Directive should be distributed. 
• It’s a good idea for heirs and estate representatives to know they exist–and where–and have a general idea of someone’s wishes. 

What should you know about an advanced Healthcare Directive–also called a Healthcare Directive or Advance Directive?

This is a notarized or witness-signed document created in anticipation of incapacity. Requirements vary by state, but templates can be accessed online or through healthcare providers. 

It can (and should) be updated/revisited as someone’s stage of life, and needs, change. It typically includes:

• A Health Insurance Portability and Accountability Act (HIPAA) Waiver of Authorization: this allows an individual’s health information to be disclosed to a third party: typically the Power of Attorney for Healthcare; sometimes close family members. 

• A “Living Will” that names the person’s wishes for how they’d like to be cared for in specific healthcare situations–and/or at the end of their life. 

• A Power of Attorney for Healthcare, which names the “Agent” or “Health Care Proxy” who will be asked to make decisions in case of the person’s incapacity. Instructions on what should happen to someone’s body after they’ve passed: will they donate organs or their entire body, be buried or cremated, etc. 

“It’s an opportunity to let your family know what you want, so a decision doesn’t need to be made under stress and deep emotion.”

Erika Schendel, director of Hudson Hospital Foundation; former manager of patient and family experience at Hudson Hospital & Clinic

Where should you keep copies of your Healthcare Directive? 

• With estate & Power of Attorney documents 
• On file with your healthcare provider(s) 
• With the healthcare agent(s) 

Some people also keep a laminated notification card–listing that Directives exist and contact info for their attorney-in-fact–in their wallet, glove compartment of their car, on the fridge, at a family cabin, etc. (Anywhere you  may have a medical incident and need intervening care)

What should you do when you’ve been given Power(s) of Attorney by a loved one?

Decide whether you have the time and ability to honor the person’s wishes. The Financial POA and Guardianship can be very time-consuming, and the person given Healthcare POA can be asked to make very difficult and emotional decisions. It’s not required that someone who is delegated accept the role. 

• The Financial POA should gain a basic understanding of the person’s assets/estate
• Someone with Healthcare POA should request a copy of the Healthcare Directives in place 
• Anyone with POAs should talk to the person who’s named them, and seek to understand their basic values and wishes.

Whew! There’s a lot here, but we promise this isn’t as daunting a process as it seems. Feel free to reach out if you need help thinking through your Powers of Attorney and Healthcare Directives–or any other part of your legacy plan, for that matter!

We’ve also created a simplified PDF of this information so you can print and share it: