Understanding the Differences: Health Care Proxy vs Power of Attorney
When it comes to making important decisions for yourself or a loved one who may become incapable of making decisions on their own, it’s essential to understand the differences between a health care proxy and a power of attorney. Both tools can be invaluable when the need arises, but they serve different purposes.
Introduction
In this article, we’ll take a closer look at these two legal documents and explore when and why these documents may be necessary. We’ll also provide examples of when each document might be appropriate and offer tips on how to make informed decisions about which one to use depending on your unique circumstances.
What is a Health Care Proxy?
A health care proxy is a legal document that outlines your medical wishes in the event that you become incapacitated and are unable to make decisions for yourself. This document designates a trusted person (aka, your proxy) to make medical decisions on your behalf when you are no longer able to do so yourself.
Benefits of a Health Care Proxy
A health care proxy provides peace of mind by ensuring that the person you trust the most is making important medical decisions on your behalf. This can be especially helpful when you are in a coma, are unconscious, or simply can’t communicate your wishes.
Key Aspects of a Health Care Proxy
When creating a health care proxy, you will need to make several critical decisions, including:
- The person(s) you are designating as your proxy
- Your medical preferences, treatment and non-treatment options
- End-of-life arrangements and spiritual considerations, if any
- The conditions under which your proxy can make decisions
What is a Power of Attorney?
A power of attorney is another legal document that grants someone the power (or authority) to make financial decisions for you if you become incapacitated and unable to act on your own. The person designated in a power of attorney is called an agent.
Benefits of a Power of Attorney
A power of attorney can be extremely helpful when managing your finances, especially if you become disabled, incapacitated, or can no longer make sound financial decisions. It allows your agent to act on your behalf in financial matters, including paying bills, managing investments, and more.
Key Aspects of a Power of Attorney
Some critical decisions must be made when creating a power of attorney, including:
- The person you are granting the power of attorney to
- The limits of authority for the agent
- The termination date for the document and/or the termination event (i.e., when the agent’s powers are to end)
- Backup agents, who can act on your behalf if your primary agent is unable to do so
Understanding the Differences
While there is some overlap between the two legal documents, there is one key difference that sets them apart: the types of decisions they address.
A health care proxy deals specifically with medical decisions, while a power of attorney deals with financial decisions. It’s important to recognize the need for both documents when crafting your estate and incapacity plans.
Conclusion
If you’re looking to create an estate plan or incapacity plan, it’s crucial to understand the differences between a health care proxy and a power of attorney. The two documents serve different purposes and address different needs. By creating both a health care proxy and a power of attorney and selecting the right agents for each, you can ensure that your medical and financial needs are met if you become unable to make decisions for yourself in the future.
