Living Will and Power of Attorney: The Other Side of Estate Planning

In last few articles on this series, we have covered major aspects of Will, Trust and probate with the following topics.

• Introduction
• Probate and Non-Probate Assets
• Revocable Living Trust
• Revocable Living Trust with Pour-Over Will

This week, we will conclude this series with a discussion on two supplemental documents that serve specific purposes, followed by a brief conclusion.

Living Will

Notice the difference in wording of Last Will vs Living Will. While we used the word Last Will in pretty much all previous articles in this series, we haven’t talked about Living Will.

A Living Will is a type of advance directive. It is a legal document that specifies an individual’s preferences regarding medical treatments and life-sustaining measures in the event they are unable to communicate or make their own medical decisions. This document can include instructions on the use of mechanical ventilation, tube feeding, and other medical interventions to prolong life. The primary purpose of a Living Will is to ensure that an individual’s healthcare preferences are known and respected at a time when they cannot express them due to their medical condition.

Power of Attorney (POA)

A Power of Attorney document is used to appoint someone to make decisions on your behalf under the circumstances specified in the document. There are broadly two types of POA.

Medical power of attorney

While a Living Will takes care of end-of-life decisions, there can be other treatment decisions that might not be related to end of life. You need someone to take those medical decisions on your behalf when you are not in a good position to take those decisions. So, you can appoint someone else to do that on your behalf using a Medical Power of Attorney.

Think of the Living Will as providing your instructions and the Medical Power of Attorney as identifying the person who can make decisions when the instructions do not cover a particular situation.

Financial power of attorney

This is to appoint someone to take your financial decisions when you are incapacitated. These financial decisions can include real estate transactions, investment accounts, insurance and annuity transactions, government benefits, and retirement plan transactions.

Medical and Financial Powers of Attorney serve different purposes and are commonly handled through separate documents. You might also want to give authority to different people for medical and financial decisions.

Conclusion

Everyone should consider having basic estate planning documents such as a Will, Living Will, and appropriate Powers of Attorney. For many families, especially those with children or significant assets, a Revocable Living Trust can also be an important part of the estate plan.

Funding the trust is a bit of work. Once you create the Trust, it is important to properly fund it. Existing assets can be transferred into the Trust, and appropriate new assets can be titled in the Trust’s name when acquired. The Pour-Over Will acts as a catch all for assets that were unintentionally left outside the Trust, but those assets may still need to go through probate.

I suggest using NetLaw to create your Will and Trust. You can modify the Will and Trust when needed and regenerate the documents. If you make changes and regenerate the documents, the updated documents need to be properly signed, witnessed, or notarized again as required by your state’s laws.

Make sure your trustees, executors, agents, and appropriate family members know that the documents exist and where the current versions can be accessed when needed.

That’s a wrap this week. Happy learning!

Contact me if you need any guidance in completing your Will and Trust.