No matter your age, you should have a plan in place in case you are ever unable to make financial or medical decisions on your own behalf. Even if you are in perfect health today, accidents or serious illnesses can occur at any time. Powers of attorney and healthcare proxies can help ensure a trusted loved one will be able to make any necessary decisions on your behalf in accordance with your wishes.
Power of Attorney
A power of attorney gives another person authority to make legally binding decisions on your behalf without further consulting you. Powers of attorney can be limited in scope, such as to complete a business deal within certain parameters, or can grant unlimited decision making ability. Similarly, they can be for a specific amount of time or indefinitely.
For estate planning purposes, powers of attorney are usually set up so that they become effective when you become incapacitated due to a sudden accident or illness or due to a worsening long-term medical condition. They are designed to manage your affairs while you are unable to do so. While you may be able to give a trusted family member access to your bank account to pay bills for you, they will be limited in other regards without a legally effective power of attorney. Banks, utilities, and other companies will not be willing to speak with them if they are not on the account. Further, if you need to sell property, have a court case, or need to enter into a contract such as a lease renewal, they will not be able to do so without a power of attorney.
An oral power of attorney is permissible at common law, but many companies and government agencies will only recognize a power of attorney when it is granted in writing. Each state has varying requirements for what constitutes a valid power of attorney, and notarization and/or witness signatures may be required. It is permissible to go above the minimum requirements, and this may be advisable especially if you travel or own property in other states and your home state has lower requirements.
Some states separate medical decisions from financial ones. In these states, a separate document, usually called a healthcare proxy, will be needed to designate someone to make healthcare decisions on your behalf if you are incapable of doing so. In other states, a valid power of attorney will be adequate to make healthcare decisions. These decisions will often include tough decisions on things like feeding tube removal, resuscitation efforts, and organ donation. For that reason, it is vital that you not only choose someone who you trust, but who also fully understands your values and beliefs with regard to those areas. While it is not necessary to include medical instructions in a healthcare proxy, it may be advisable to ensure that your beliefs are followed.
The legal requirements of a healthcare proxy vary by state, but at minimum your agent’s name, address, and phone number will need to be included so that they can be contacted. You may select any person over 18 as your agent, but a person cannot act both as your agent and as your treating doctor at the same time. For the document to have legal effect, witness signatures and/or notarization may be required. Most states have a standard form that comes with instructions on the legal requirements that you can use as a starting point.