Have you made preparations? It’s a question I’ve asked clients more times than I can count, but I was reminded of the significance of the question and the possible consequences when I recently asked the same thing of a family member.

Bill (not his real name) is 70 years old and never been married. He’s in the early stages of dementia but thinks he’s fine. He has a family history of Alzheimer’s. When he took his first covid shot, Bill had a severe reaction that caused him to forget the previous 24 hours. He panicked. He didn’t know what to do. We had to talk him off the emotional ledge. Quite literally, he freaked out. My wife and I climbed in the car and got to him as fast as we could.

A day later, his mind began to clear a bit.

 

“Bill, have you got a healthcare power of attorney in case this happens again?”

 “Ah, no. What’s that?”

 

I wasn’t surprised by the answer. In fact, Bill doesn’t have anything in place that legally allows someone to step in and make decisions for him physically, emotionally, or financially if he can’t.

But Bill’s story is common. Most people know they should do some estate planning, and they intend to get around to it someday, but often someday never comes. And when their health or mind decline, other people are scrambling to make sure they’re cared for. Sometimes it requires involvement by a court to appoint someone who can legally act on the person’s behalf, a cost and delay not necessary if pre-planning has been done.

So, if you haven’t gotten “around to it” or you know someone who’s in the same boat, here are the basics you need to get in place while you’re still well enough and cognitive enough to make those decisions.

 

Healthcare Proxies

A healthcare proxy, also known as a medical power of attorney or a durable medical power of attorney, is a legal document in which you name a person you trust to make medical decisions for you if you become incapacitated. Your proxy can have access to your health records and other information. If you want to place restrictions on what your proxy can do or see, the restrictions should be included in the healthcare proxy document.

The proxy should also be someone who will ask lots of questions as well as be assertive so your medical wishes are honored. For that to happen, your proxy needs to know how you feel about:

  • Health, illness, death and dying
  • Medical treatment preferences, such as feelings about palliative (pain) care, life-sustaining measures like artificial hydration and nutrition, and treatments you may need in the event you are unconscious
  • Religious beliefs
  • Feelings about healthcare providers, caregivers, and healthcare institutions.

 

Living Will

A Living Will is a legal document that outlines your choices for end-of-life medical treatment—the procedures you want—or don’t want—to prolong your life. The Living Will is different from a medical power of attorney. The Living Will lists your medical treatment wishes. It does not appoint a person to make medical decisions for you.

 

Advanced Directives

While a Living Will is a single document, Advanced Directives, also known as Directive to Physicians, Advanced Healthcare Directives, and Declaration Regarding Life-prolonging Procedures, can be made up of several documents, which can include:

  • The Living Will
  • DNR (Do Not Resuscitate) Order
  • Directions about organ and tissue donation
  • Specific instructions about a diagnosed illness
  • Medical Power of Attorney

 

All these documents let doctors know about your wishes for end-of-life medical care.

 

Financial Power of Attorney

The Financial Power of Attorney names a person to handle finances on your behalf up to the point of death. The Financial POA needs to be someone you trust, and it’s beneficial if that person has some knowledge and experience with finances. You’ll want to acquaint that person with your financial situation and where they can find your financial records and documents. Your Financial Power of Attorney doesn’t have to be the same person you name as your Medical Power of Attorney.

 

Last Will and Testament

The Will contains your instructions for the disposition of your assets. Along with those instructions, you name an executor who will be in charge of settling your estate. The executor should be someone you trust, and someone who will stand up to family members who think the distribution of assets should be different. Remember, the Will contains YOUR instructions—YOUR wishes.

Many of the documents we’ve discussed will be drafted at the same time you have your Will created.

 

Let Someone Know

Once you have your documents created, it’s important to talk with the people you’ve chosen to be responsible on your behalf. Explain to them what you want. Go over the documents with them. And most importantly, show them where to locate information in the event they have to take over:

  • Financial records
  • Loan documents
  • Where you keep your monthly bills
  • Bank statements
  • The checkbook
  • Medical insurance information
  • A list of important contacts and their information
  • Anything necessary for your medical power of attorney, financial power of attorney, or executor to carry out the jobs you’ve asked them to do for you.

 

Don’t be like Bill, completely unprepared if his health or mind continues to decline. Put things in place now.

 

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.