A Living Will and a Durable Power of Attorney
A typical concern for the average American, yet one that is rarely planned for and addressed beforehand, is the possibility of an extreme and unexpected disability being suffered by you or your spouse. We read and hear about these horrible situations all the time, yet rarely do we think such an event could befall our families or ourselves.
Think about it for a moment. What would your family do if you had an accident that thrust you into a coma. In a worst case scenario you are "brain dead" yet still able to be kept alive through artificial means. This would be an ethical nightmare for your family and doctors (the doctors would also have certain legal concerns). Should the family "pull the plug" or continue to exhaust the family's resources and mental endurance by keeping you alive? Moreover, your family probably is not aware of what your desires would be in this situation, which just adds to the confusion and guilt of all concerned.
Throughout this book we have looked for sound but simple answers to our most pressing financial concerns. Frequently, we have found a relatively simple solution to something we previously thought was an uncontrollable concern or problem. Here we see another situation where the nightmare I just described can be completely and cheaply addressed before the problem arises.
Living wills A living will is a legally recognized document under which a person states that he or she does not wish to receive unusual or extraordinary medical treatment in order to preserve his or her life. The living will typically rejects the use of life-extending medical procedures that would artificially delay the dying process. Rather, the living will will voice a preference on the part of the person to die naturally in such a circumstance. Such a determination, incidentally, is deemed morally acceptable by the major religions and it is distinguished from the unacceptable practice of euthanasia (see, for example Section 2277 and 2278 of the Catechism of the Catholic Church-go to my Web site, click on Legal Protections, then Living Wills, then Ethical Considerations).
Living wills
A living will is a legally recognized document under which a person states that he or she does not wish to receive unusual or extraordinary medical treatment in order to preserve his or her life. The living will typically rejects the use of life-extending medical procedures that would artificially delay the dying process. Rather, the living will will voice a preference on the part of the person to die naturally in such a circumstance. Such a determination, incidentally, is deemed morally acceptable by the major religions and it is distinguished from the unacceptable practice of euthanasia (see, for example Section 2277 and 2278 of the Catechism of the Catholic Church-go to my Web site, click on Legal Protections, then Living Wills, then Ethical Considerations).
A durable power of attorney A durable power of attorney (POA) is a legal document that gives someone the power to make decisions in your best interests and otherwise deal with your assets. The person who you are authorizing to act on your behalf is referenced in the document as the "attorney" even though that person does not need to be a lawyer. Obviously, the person designated as your attorney under the durable power of attorney document would be someone that the grantor of the power completely trusts. The grantor may revoke any POA at any time as long as the grantor is legally competent when the revocation occurs. For example, I am designated the attorney on my father's durable power of attorney. The POA extends to Dad's real estate as well as his personal property. Therefore, to assure its enforceability, I recorded it in the same place that mortgages are recorded in the County Recorder's office where Dad lives. Thus, I am legally empowered to deal with any and all of Dad's real and personal property in the same manner that he could. Why did Dad give me the POA described in the Example? A couple of reasons. If he was competent, but not physically present to effect a transaction involving his real and personal property (because, for example, he was out of the country), I could complete the transaction on his behalf. But the big reason is that if Dad ever became legally incompetent and/or physically or mentally incapacitated, I would have the legal authority to deal with his assets on his behalf. Without the POA, if Dad became incapacitated, his family would have to go through the time and expense to petition the local Probate Court to appoint a guardian on his behalf who would be so empowered. Certain states allow for a more limited power of attorney that becomes effective only on the legal incompetancy of the grantor. This type of power of attorney is called a "springing" power of attorney. Unlike the durable power of attorney that is effective from its creation, the springing power of attorney only becomes effective on the incapacity of the grantor. Living wills and power of attorney documents are readily available as "fill in the blank" forms that may be purchased in bookstores or off of the Web. In the case of a living will, the form may be obtained from most hospitals. As was the case with your will, I strongly advise that you spend the few hundred dollars (ask for a quote in advance) that it will cost you to have a lawyer prepare your living will and power of attorney document. As we have discussed above, these documents are simply too important to mess up and they are among the cheaper legal documents that you can obtain from a lawyer.
A durable power of attorney
A durable power of attorney (POA) is a legal document that gives someone the power to make decisions in your best interests and otherwise deal with your assets. The person who you are authorizing to act on your behalf is referenced in the document as the "attorney" even though that person does not need to be a lawyer. Obviously, the person designated as your attorney under the durable power of attorney document would be someone that the grantor of the power completely trusts. The grantor may revoke any POA at any time as long as the grantor is legally competent when the revocation occurs.
For example, I am designated the attorney on my father's durable power of attorney. The POA extends to Dad's real estate as well as his personal property. Therefore, to assure its enforceability, I recorded it in the same place that mortgages are recorded in the County Recorder's office where Dad lives. Thus, I am legally empowered to deal with any and all of Dad's real and personal property in the same manner that he could.
Why did Dad give me the POA described in the Example? A couple of reasons. If he was competent, but not physically present to effect a transaction involving his real and personal property (because, for example, he was out of the country), I could complete the transaction on his behalf. But the big reason is that if Dad ever became legally incompetent and/or physically or mentally incapacitated, I would have the legal authority to deal with his assets on his behalf. Without the POA, if Dad became incapacitated, his family would have to go through the time and expense to petition the local Probate Court to appoint a guardian on his behalf who would be so empowered.
Certain states allow for a more limited power of attorney that becomes effective only on the legal incompetancy of the grantor. This type of power of attorney is called a "springing" power of attorney. Unlike the durable power of attorney that is effective from its creation, the springing power of attorney only becomes effective on the incapacity of the grantor.
Living wills and power of attorney documents are readily available as "fill in the blank" forms that may be purchased in bookstores or off of the Web. In the case of a living will, the form may be obtained from most hospitals. As was the case with your will, I strongly advise that you spend the few hundred dollars (ask for a quote in advance) that it will cost you to have a lawyer prepare your living will and power of attorney document. As we have discussed above, these documents are simply too important to mess up and they are among the cheaper legal documents that you can obtain from a lawyer.
The 360 Degrees of Financial Literacy Web site offers general information for managing personal finances and does not recommend specific financial actions. For financial advice tailored to your situation, please contact an expert such as a CPA or a personal financial advisor.