Understanding Wills, Powers of Attorney & Healthcare Proxies

Category: Aging Well

Understanding Wills, Powers of Attorney & Healthcare Proxies

Legal planning is not only about what happens after death.

It can also determine who is allowed to manage your finances, communicate with healthcare providers, or make decisions if an illness or injury prevents you from doing those things yourself.

Wills, powers of attorney, healthcare proxies, and living wills serve different purposes. Having one does not automatically replace the others.

The laws governing these documents vary by state. This guide explains their general roles, but an attorney familiar with the laws where you live can help you create documents that are valid and appropriate for your situation.

Why Planning Ahead Matters

Without written instructions, your family may have to make difficult decisions without knowing what you wanted.

They may also need to go to court before anyone has authority to manage your money or property.

Planning ahead can help:

Keep you involved in choosing the people who may act for you.
Explain how you want property distributed.
Make healthcare preferences easier to understand.
Reduce uncertainty and family disagreements.
Give trusted people legal authority when it is needed.
Avoid unnecessary delays during an emergency.

You do not need to be wealthy, seriously ill, or very old to benefit from these documents.

Understand the Basic Differences

The simplest way to separate these documents is by asking when and why each one is used.

A Will

A will generally explains what should happen to your property after your death.

A Financial Power of Attorney

A financial power of attorney authorizes someone to handle specified financial or legal responsibilities while you are alive.

A Healthcare Proxy

A healthcare proxy names someone who can make healthcare decisions if you cannot make or communicate those decisions yourself.

A Living Will

A living will records your preferences about medical treatment if you cannot communicate them.

These documents may work together, but they are not interchangeable.

What a Will Does

A will, sometimes called a last will and testament, explains how you want your property handled after your death.

Depending on state law and your situation, a will may allow you to:

Name the person who will manage your estate.
Identify who should receive property.
Leave money or belongings to individuals or organizations.
Name guardians for minor children or dependent adults.
Provide instructions for caring for pets.
Explain certain funeral or burial preferences.
Create trusts that begin after your death.

The person responsible for carrying out the will may be called an executor, personal representative, or estate representative.

Choose someone who is trustworthy, organized, willing to serve, and able to handle paperwork and deadlines.

What a Will Does Not Do

A will generally does not:

Give someone authority to manage your money while you are alive.
Allow someone to make healthcare decisions for you.
Control every asset automatically.
Avoid probate simply because it exists.
Replace beneficiary designations.
Provide immediate instructions during a medical emergency.

Some property may pass outside the will because of:

A named beneficiary.
Joint ownership.
Transfer-on-death instructions.
Payable-on-death instructions.
A trust.

Retirement accounts, life insurance policies, and certain financial accounts commonly pass according to their beneficiary forms. Review those designations separately because the person named on the account may receive the asset regardless of what the will says.

An attorney can help you understand which assets your will actually controls.

What Happens Without a Will

If you die without a valid will, state law generally determines who receives property that would otherwise pass through the will.

This is called dying intestate.

State law may not distribute property the way you would have chosen. An unmarried partner, friend, stepchild, distant relative, charity, or other important person may not receive what you intended unless legally provided for.

The court may also appoint someone to manage the estate.

Having a will does not eliminate every legal process, but it gives the court and your family clearer instructions.

What a Financial Power of Attorney Does

A financial power of attorney is a legal document that allows another person to act on your behalf.

The person creating the document is commonly called the principal. The person receiving authority may be called the agent or attorney-in-fact.

Depending on the document, an agent may be authorized to:

Pay bills.
Manage bank accounts.
Deposit checks.
File taxes.
Handle insurance matters.
Manage investments.
Apply for benefits.
Sign contracts.
Buy or sell property.
Work with financial institutions.
Manage certain business interests.

A power of attorney can be broad or limited.

For example, you may authorize someone to complete one real-estate transaction or give broader authority to manage finances during a period of illness.

The document should state what the agent may and may not do.

Understand “Durable” Power of Attorney

A standard power of attorney may end if the principal becomes incapacitated.

A durable power of attorney is designed to remain effective if the principal becomes unable to make or communicate decisions.

This is why durable financial powers of attorney are often used in planning for illness, injury, or changes in memory and thinking.

Some powers of attorney take effect as soon as they are signed. Others may be designed to take effect only after a specified event, such as a determination of incapacity. This is sometimes called a springing power of attorney.

State rules differ, and proving that the triggering event occurred can sometimes cause delays. Discuss the advantages and disadvantages with an attorney.

The Consumer Financial Protection Bureau provides a plain-language explanation of powers of attorney.

Choose a Financial Agent Carefully

A financial power of attorney can grant significant authority.

Choose someone who:

Is trustworthy.
Understands your preferences.
Keeps accurate records.
Can separate your money from their own.
Will explain decisions.
Can work with banks and professionals.
Is willing to act in your best interest.
Can manage responsibilities without being pressured by others.

You may also name a backup agent in case the first person cannot or will not serve.

Do not select someone only because that person is the oldest child, closest relative, or most convenient choice. Choose the person best suited to the responsibility.

An agent must use your money for your benefit and follow the authority provided in the document. The agent does not become the owner of your property.

A Power of Attorney Does Not Replace a Will

A financial power of attorney generally operates only while you are alive.

The agent’s authority ordinarily ends when you die. Responsibility for the estate then shifts to the executor or personal representative.

This means the same person may serve in both roles, but each role requires separate legal authority.

What a Healthcare Proxy Does

A healthcare proxy is a person you authorize to make healthcare decisions if you cannot make or communicate them yourself.

The legal document may be called:

Healthcare proxy.
Healthcare power of attorney.
Medical power of attorney.
Durable power of attorney for healthcare.
Appointment of healthcare agent.

Terminology varies by state.

Depending on state law and the document, the proxy may be able to:

Speak with healthcare providers.
Review medical information.
Consent to or refuse treatment.
Choose among treatment options.
Make decisions about surgery.
Select healthcare facilities.
Make decisions about life-sustaining treatment.
Carry out preferences stated in an advance directive.

You continue making your own healthcare decisions while you are able to do so. Naming a proxy does not automatically transfer control of your medical care.

Choose the Right Healthcare Proxy

Choose someone who:

Understands your values.
Is willing to ask questions.
Can remain calm during a crisis.
Can communicate with healthcare providers.
Will follow your wishes even if they personally disagree.
Can handle disagreement among relatives.
Is reasonably available.
Is legally eligible to serve in your state.

Talk with the person before naming them.

Discuss:

What makes life meaningful to you.
Treatments you would or would not want.
Your feelings about pain management.
Your preferences about life support.
Where you would prefer to receive care.
Religious or cultural beliefs.
Organ donation.
Who else should be included in discussions.

Name a backup proxy in case your first choice is unavailable.

The National Institute on Aging offers guidance for choosing a healthcare proxy.

What a Living Will Does

A living will is a type of advance directive that describes medical care you would or would not want if you could not communicate your decisions.

It may address:

Cardiopulmonary resuscitation.
Mechanical ventilation.
Artificial nutrition or hydration.
Dialysis.
Antibiotics.
Comfort care.
Pain management.
Organ and tissue donation.

A living will provides written guidance, while a healthcare proxy provides a person who can respond to the actual situation.

Having both can be helpful. Written instructions cannot predict every medical circumstance, and a proxy may need guidance when making an unexpected decision.

Understand Other Medical Orders

A living will is not the same as a medical order such as:

Do-not-resuscitate order.
Do-not-intubate order.
Medical order for life-sustaining treatment.
Physician order for life-sustaining treatment.

Names and requirements vary by state.

Advance directives express preferences and name decision-makers. Medical orders are generally completed with an authorized healthcare professional for people with serious illness, frailty, or specific treatment preferences.

Ask your healthcare provider which documents are appropriate for your health and circumstances.

Complete Documents While You Can Make Decisions

To create or change legal planning documents, you generally must have the legal ability to understand the decision you are making.

Do not wait until a serious illness or significant cognitive change makes your wishes difficult to document.

Early planning allows you to:

Consider choices without pressure.
Select the right people.
Ask questions.
discuss preferences.
Complete state requirements.
Resolve disagreements.
Update documents later if your wishes change.

Creating a document does not mean you expect to lose the ability to make decisions soon. It is a way to remain involved if an unexpected event occurs.

Helpful Resources: Browse Personal Records for products, equipment, services, or supplies related to this section.

Follow Your State’s Requirements

A document downloaded online is not automatically valid.

State law may determine:

Required wording.
Witness requirements.
Notarization.
Who may serve as a witness.
Who may act as an agent.
How documents become effective.
How documents may be changed or canceled.

An estate-planning or elder-law attorney can review your situation and prepare coordinated documents.

If cost is a concern, older adults may qualify for free or reduced-cost legal services. The Eldercare Locator can help locate legal-assistance programs. Search online or call 1-800-677-1116.

Store and Share the Documents

Keep original documents somewhere secure but accessible.

The appropriate people should know:

Which documents exist.
Where the originals are stored.
Who has been named.
How to obtain copies.
Which attorney prepared them.

Provide copies when appropriate to:

Your financial agent.
Your healthcare proxy.
Backup agents or proxies.
Healthcare providers.
Attorney.
Relevant financial institutions.
Trusted family members.

Do not keep the only copy of an urgently needed healthcare document in a safe-deposit box that no one else can access.

Consider keeping advance-directive information in your medical record and bringing a copy when entering a hospital or care facility.

Review the Plan Regularly

Review your documents after:

Marriage.
Divorce.
Death of an agent, proxy, beneficiary, or executor.
Birth or adoption.
Move to another state.
Major diagnosis.
Change in family relationships.
Significant change in property or finances.
Change in your healthcare preferences.
A named person becoming unwilling or unable to serve.

Even without a major change, review the documents every few years.

Destroy or clearly mark outdated copies after new documents are properly completed. Make sure everyone who received the old version knows it has been replaced.

Start With the Decisions, Not the Forms

Before completing documents, write down:

Who should manage your estate?
Who should receive your property?
Who should manage finances if you cannot?
Who should make healthcare decisions?
Who could serve as a backup?
What medical treatments matter most to you?
Which people need to know about the plan?
Where should the documents be stored?

The documents are important, but the conversations behind them are just as important.

Clear planning gives the people you trust the authority and guidance they may need—and helps preserve your choices when you cannot speak for yourself.