Some Additional Considerations in Estate Planning
When preparing a will and any trusts which may be appropriate for “estate planning,” one should consider additional documents which help one prepare for his or her inability to make medical decisions and business decisions during one’s lifetime, in the event that a person becomes unable to act due to physical or mental inability as a result of age or illness.
The recommended documents are a Durable Health Care Power of Attorney (HCPA) and a Durable Power of Attorney (POA).
In drafting each of these documents it is most important that the person named to act on your behalf when you are unable is a trusted individual who understands your medical wishes in the case of the HCPA; and your personal and business framework for handling your affairs in the case of the POA.
Durable Health Care Power of Attorney
The HCPA form will include the appointment of a person you trust to make medical decisions on your behalf when you are not able to do so yourself, and the parameters within which you direct them to act. It is important to speak with this person to explain your medical wishes, as they may be called upon to act in a situation which is not foreseeable, and they should be made familiar with your concerns in order to be able to execute your wishes by conveying information to your health care providers.
The HCPA may be used in conjunction with a “Living Will,” which states your wishes and may be provided to your physician. However this form does not include the appointment of an agent which can be a very important element of your care.
Power of Attorney
The POA permits you to appoint a person to handle your banking and personal business, and business transactions. This form may be immediately exercisable even in your good health and ability to act on your behalf if you choose it to be so. The person appointed is your “Attorney-in-Fact.”
You may alternatively prepare a “springing” power of attorney which is only usable upon the occurrence of an event set forth in the document such as your incompetency or inability to act on your own behalf. A standard for this determination should be set forth in the document if this type of POA is chosen, such as: “proof of my inability to act or incompetence to act will be sufficient if it is in the nature of a letter from my treating physician.”
It is most important in the case of either of these documents that the person chosen to act on your behalf be someone whom you trust and who understands your wishes. The HCPA must act within the parameters you set forth in the document. The POA must act in your best interests. Either document may be limited in the decisions which may be made by the appointee, or may be very broad. Either may be revoked by you during your lifetime while you are able to act on your behalf. For the possibility of revocation you should keep a record of those to whom you provided a copy of the revoked documents and advise them that it is revoked and ask for return of the document, and direct that there be no further reliance upon it after revocation. Often the POA will include instructions as to how it should be revoked. In any case alerting any recipients of these documents of revocation and directing that the documents be returned to you and not used any further is a very important step to be taken.