Estate planning isn't only for when you, someday, pass on, but rather for that or any situation which incapacitates you so that someone else needs to make decisions in your stead. For this reason, the power of attorney exists. When beginning to think about who you will select to act under your power of attorney, it's important to remember there are two principal areas in which to act, and that you might wish to have a different power of attorney for each.
1. Healthcare Power of Attorney
Also known as a healthcare proxy, this document names the person who will be responsible for seeing to it that your wishes regarding your own healthcare are met. Two things to note when it comes to a healthcare proxy or a healthcare power of attorney:
- Include a HIPAA Provision: Without this, the individual you select may not have access to your medical information. While you will stipulate how you would like a number of healthcare decisions to be made, there may arise a decision you are unable to make that is not specifically outlined ahead of time. Without having access to your medical information, your proxy cannot hope to make an informed decision as he or she sees fit to honor your wishes.
- Communicate your wishes to your healthcare proxy or healthcare power of attorney when you're able to discuss those wishes.
2. Financial Power of Attorney
This document will specify an individual to make your financial decisions in the case you are unable to continue doing so. Keep in mind that this not only entails decisions you want made when you are no longer living, but may also have to include those you would continue making throughout your life. If you were incapacitated tomorrow, what financial decisions would need to be made on your behalf? This includes all of your estate, so it's important to specify your desires for gifting or charitable donations, for example.
As with the healthcare proxy or healthcare power of attorney, be sure to discuss your wishes with the agent named in your financial power of attorney so that if he or she has any questions, you can answer them before they become material.