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The Importance of Powers of Attorney and Healthcare Directives

Today we’re going to discuss the unsung heroes of the estate planning world: Powers of Attorney and Healthcare Directives.

When we think about estate planning, we usually focus on the Wills and Trusts, and for good reason: they are the documents where you make provisions for your family and memorialize your wishes. But, you should also make provisions for yourself to safeguard yourself in your time of need.

What if you’re in a car accident and are knocked unconscious? What if you have a stroke? What if you’re unreachable and your bills need to be paid? Who will make financial and healthcare decisions on your behalf? There are statutory defaults, but if you want to designate your own agents to take on these roles for you, you do so in a Power of Attorney and a Healthcare Directive.

Powers of Attorney

You may be asking yourself (i) what is a Power of Attorney exactly, and (ii) can you tell me more about why I’d need one? A Power of Attorney is a document that gives a person authority to act on your behalf, thus becoming your Attorney-in-Fact. The Power of Attorney document can be very specific or very broad. You can give your Attorney-in-Fact the power to handle your bank accounts, sell your real property, run your business, or apply for public benefits. Or you can give them the specific power to sell one piece of property.

Why do you need one? Because it’s a simple tool that allows your Attorney-in-Fact to handle your financial matters without entering into more complicated agreements, like a Trust. The Power of Attorney helps eliminate the need for a guardian or conservator in the event of your incapacitation. You should pick someone you trust to hold the legal authority to make decisions should you experience an unforeseen event like a stroke or car accident.

There are four types of Powers of Attorney:

  • A General Power of Attorney: allows the Attorney-in-Fact to act as you in dealing with financial accounts and managing personal finances. However, it is terminated upon your incapacitation. It can also be revoked.

  • A Durable Power of Attorney: allows the Attorney-in-Fact to act on your behalf and includes a durability clause that keeps the Power of Attorney in place after you become incapacitated.

  • A Special or Limited Power of Attorney: this is when you have given the Attorney-in-Fact very specific powers which limit their authority and responsibility.

  • A Springing Durable Power of Attorney: this only becomes effective upon your incapacitation. In Utah, a Power of Attorney is considered durable unless it expressly states that it terminates upon your incapacitation.

Each type of Power of Attorney does confer a slightly different power on your Attorney in Fact. So, as you contemplate creating yours, be sure you know what kind will best suit your needs.

Some additional points about Powers of Attorney are:

  • The power must be given, it is not something you can obtain over someone on your own.

  • In order to create one, you must have the legal capacity to understand the authority that you are assigning to someone.

  • The Attorney-in-Fact only has the authority to do those things that are designated in the document.

  • The appointed person must make decisions the way you want. They cannot follow their own desires when representing you.

Bestowing someone you trust with the power to act on your behalf in financial and business is a big decision. Take the time now to memorialize your wishes for yourself and your future in a Power of Attorney.

Healthcare Directives

In Utah, a Healthcare Directive designates a health care agent to make healthcare decisions on your behalf when you are unable to do so. It goes into effect upon your inability to make or communicate healthcare decisions. If you fail to appoint someone to fill this role, the court will appoint a guardian, which may create a costly legal process.

If you have a Healthcare Directive, you are able to choose the person who will determine what treatments and health care you will receive, including end-of-life or palliative care decisions. Your healthcare agent makes surrogate decisions, which means that they step in your shoes and make the decisions that you would make on your own if you were able to do so. Ideally, surrogate decisions should be based on your input and the specific preferences you communicated before any loss of decision-making capacity. It should be based on a prior understanding of your healthcare preferences and what you would want under the circumstances.

Healthcare Directives are intensely personal documents. When thinking about creating your own, consider:

  • Your values and how they may be reflected in your healthcare;

  • Your priorities;

  • What life means to you personally; and

  • How important quality of life is to you.

Are there certain conditions that are worse than death to you? Would you undergo a risky procedure if it had a low chance of survival? What if that same procedure had a high chance of survival but would permanently lower your quality of life? How long would you like to be on life support? It’s never fun to think about these things, but by selecting a health care agent and informing them of your preferences, you are preparing for the worst-case scenario and ensuring that your wishes will be followed.

Clearly, the consequences of having or not having a Healthcare Directive can be huge, which is why we so strongly advocate that everyone, regardless of age or health, have one in their estate plan. Don’t leave your relatives to fumble in the dark if the unthinkable happens and you are unable to make your own health care decisions.

Choosing an Agent

When thinking about creating your own Power of Attorney and Healthcare Directive, give special thought to who you will appoint as your Attorney in Fact and healthcare agent. Be sure they are someone who will:

  • Respect your wishes and act only in your best interest.

  • Comply with the terms of the Power of Attorney and Healthcare Directive.

  • Follow the directions they have been given for your care.

  • Involve you in the decision making (to the extent that you are able to participate).

  • Manage your assets carefully.

  • Keep good records.

And, most importantly, make sure to choose someone you trust and take the time to talk through your desires and wishes with them now.

If you would like to talk to an attorney about creating a Power of Attorney and/ or Healthcare Directive, contact us today.



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