Power of Attorney and Living Wills: What You Need to Know Transcript
Hello, here we are, again talking a little bit about death and taxes. Today, let’s talk a little bit about Power of Attorney and Living Wills. What you need to know is these are important, because of the three documents somebody really does need as part of their estate plan, these are two of the three. The first is the Will, but the second “take care of you while you’re alive,” they provide you a way of having somebody help you easily without having to go to court, without having to hire an attorney right, and having people fight about who’s the one to take care of you.
Now, two different circumstances, they sound similar, but they’re not. One is the Power of Attorney, and one is the Living Will. So, a Power of Attorney, in general terms, is a document where you’re giving the power to act for you, you’re giving somebody the Power of Attorney, right? To be your attorney to act for you. That could be to sell your house, could be to manage your money, it could be to file your taxes. And it can be very broad, it can be a general Power of Attorney, where you grant somebody very general rights to do pretty much anything you could do financially. Or it could be a special Power of Attorney, where you give somebody a narrow power, like being able to sell your car to Bob on Tuesday, for $10. It can be very specific.
Now, for most people, you’re dealing with a general durable Power of Attorney, meaning that you’re giving somebody the power to act for you if you are ever unable to act; if you get Alzheimer’s if you’re in a car accident. And you can see this is a very important thing because if you own something together with somebody else, like a house, like with your spouse, and you became incapacitated, well, you haven’t lost your ownership rights, the person still owns part of the house or you still own part of the house. So they can’t sell it, let’s say without going to court, it’s very expensive, it takes time. Whereas with a durable General Power of Attorney, you’ve given somebody to act to take care of that issue when it comes up.
Now the Living Will is a document that you give to somebody else that includes a lot of different little pieces. But in general, you’re giving a statement as to your wishes for your medical care when you’re not able to make those decisions any longer to yourself. Now the Living Will part is where you are saying things. You’re saying, “Doctor, you don’t know me, here are my thoughts about surgery about medical care in general,” or who could visit you maybe even all the way down to my own pulling the plug. It can also be a type of Power of Attorney where there’s a medical Power of Attorney involved, and that’s very typical, which again, is sort of a special Power of Attorney where you’re saying this is the person who has the power to make medical decisions for me – everything from how many pillows are going to be fluffed on your bed, in the hospital, to who gets to visit you, to whether you get surgery, to whether it’s time to agree with the doctor to end care. So there’s some overlap, you can see between the documents, but in general, think of the Power of Attorney when it’s usually mentioned meaning who’s in charge of monetary things. Whereas the Living Will is who’s in charge of medical care, or what we should do for you if you ever become sick and are able to speak for yourself.
Now a couple of things, common things about these documents, medical Power of Attorney, you got to pick somebody who can do this job. Not everybody’s good in the hospital. Somebody might be very much your friend, but they might faint in the hospital, not a good candidate for your Living Will. You need somebody who can step up and take care of business. And it also needs to be somebody who can act in an emergency because, in all likelihood, that’s what this is going to be. It’ll be an emergency at some time. So you need to share this document with them. They should have it as a PDF on their phone or their computer no matter where they are on earth so they can text the nurse’s station and help take care of you.
At our firm, we provide our clients with PDF copies and their portals so you can easily download it, share it, and it’s also a really good time that it prompts them to ask questions that they might put off, like, what kind of care do you want and what would you want have done in certain circumstances? Now the financial Power of Attorney, is a little different. Nobody, in general, needs your financial Power of Attorney and an emergency. If they’re paying your credit card bills. Can it be done today? Or tomorrow? Yes. So a lot of people will have us take the financial Power of Attorney store it, but they won’t share a PDF, because a PDF is as good as the original. So they want the agent to come to us and prove to us that they’re incompetent, and then would give them the copy. And they can take care of them.
Even spouses, a lot of people just feel uncomfortable having their spouse have the power, easily sitting on their phone, perhaps to go to the bank and empty their 401K, or to sell the house. It’s your call, of course, you know, everybody feels a little differently about that. But if you feel better having people ask for it, there’s nothing unusual about that. It’s a very powerful document that you should be careful about. So again, what information is in that Living Will? A lot of people ask this. Of all the documents, this is the one where I see the deer-in-the-headlights sort of look when the time comes to sign it. Well, it should, of course, communicate to a doctor out there that these are your wishes about medical care. The whole document, though, is based on you having had a great conversation with your medical Power of Attorney so that that person, that agent, that surrogate sometimes it’s called, is able to know what you want, because think of them as kind of like your avatar, they’re supposed to sit there in the room with the doctor and listen and speak for you. Right? They’re not supposed to say this is what “I think is right,” they’re supposed to say, here’s what you would do. So they need to know that data. What does the doctor need to know? Well, typically the document will reflect a series of choices as to end-of-life decisions. So if the doctor and your surrogate agree, the time has come, right, this is not just an emergency room run or if you have COVID or something, this is when everybody agrees the time has come. What do you want, and what don’t you want?
And I find that most people say well look at it, if the person I’ve chosen to reflect my wishes and the doctor agree, I don’t want anything anymore. Let me go. But other people, on the other extreme, say “I don’t really trust any of you folks, I want everything until you know, the body totally goes.” And a lot of people are in the middle, you know, they might want some things, perhaps for a religious reason, or things that just make them feel comfortable. But other things, it’s okay to let go, like take me off the respirator. You know, if I die, I die if I’m not in the respirator, but feed and water me, right?
Now, who should you pick for these jobs? Again there are different personalities, the medical Power of Attorney is somebody who can work well in the hospital, function well in the hospital, and is going to reflect your wishes. The person who’s the financial Power of Attorney has got to be somebody you can trust to manage your money when you’re not able to any longer, maybe for the rest of your life. So you have to trust them. And they have to be up to that job. Now, they don’t have to do everything, they can hire a realtor to sell your house, they can hire an accountant to do your taxes. But they need to be responsible enough to get these things done, because you can’t anymore.
So these are, you know, important documents that really everybody should have. And if you’re listening to this, and you have a child who’s now 18, or you know, early 20s, who might think they’re going to live forever, nothing bad ever happens to them, they really still need these documents. If they become incapacitated in an accident, even for a short amount of time. If you don’t have these documents, you know, they’re not under 18 any longer, it’s really legally not much of your business, the default might be eventually that you as a parent would have a say. But it might take some time. Whereas if they want you to be able to speak for them in an emergency, they should do their chores, they got to get these documents done and share them with you. So you have the PDF. So if you’re on vacation in California, and they have a car accident in Chicago, well, you can text or email the copies of the PDF to the nurse’s station and find out what’s going on. If you don’t have them. Well, you know, you’re just somebody on the phone, so you might not be able to find out what’s going on. I jokingly say it’s true, but it’s when I was 18. I had to sign up for the draft. But when kids nowadays turn 18, well, they need to do a medical Power of Attorney and a financial Power of Attorney.
So anyway, folks, remember every jurisdiction has its own documents, they all have Powers of Attorneys, they all have Living Wills, but they have their own special way that they like to see them. Now they transfer from state to state, you know, if you do one in one state, it’s going to be good in the other. But you should always talk to somebody local about their local rules and nuances. And make sure you check up on them every once in a while because they do change over time. The laws that cover them do change and sometimes drastically. So you should always make sure your document is up-to-date. So I hope this has been useful to you. And I hope you like the examples and the things I said if you have questions if you happen to be in Pennsylvania, New Jersey, and want to give me a call, set up a time to talk about documents for yourself. Otherwise, go talk to your professional, get it done, and make sure your kids get it done. Alright, guys, just another conversation about death and taxes. Peter Klenk, trust and state’s attorney, and I look forward to talking to you more. Bye now.