No. 1: The durable power of attorney which creates an agency relationship under which the principal appoints another person to transact business, legal and financial matters for the principal. It is effective until the death of the principal.
Why You Need It: It can prevent many problems caused by the incapacity of the principal. It can avoid the need for expensive and hard-to-obtain guardianship and conservatorship rights. It allows the person you have chosen to take quick action on your behalf.
No. 2: Appointment of a health-care representative. You appoint another individual to make health-care decisions on your behalf in case you are either incapacitated or unable to understand the consequences of a health-care decision. The designated agent may request, receive and review information regarding your physical and mental health, medical and hospital records and may employ or discharge health-care providers. They may also authorize admissions or discharges from a health-care facility and consent to the provision, withholding or withdrawal of health-care, including life-sustaining procedures.
Why You Need It: Ensures an agent exists that can follow your wishes and express them to health-care providers at a time when you are unable to do so yourself. It can help to eliminate confusion and indecision when timely decisions are required, and it avoids family disputes as to who is in charge of making those decisions.
No. 3: Advance care directive or living will.
Why You Need It: Helps to ensure that the treatments you will receive in a terminal or permanently unconscious situation are in concert with your wishes and provides guidance to your health-care representative.
No. 4: The will or revocable living trust answers the question of who will inherit your assets after death and the best way to pass on those assets to comply with your wishes. Both documents also should analyze the amount of various taxes that could be payable at death and then devise the best methods to eliminate, minimize or postpone their impact.
Why You Need It: If you do not have one of these documents, your assets will pass under the laws of intestacy and may not go to the beneficiaries you intend. You also lose the ability to make tax elections that could maximize the value of what you pass on to your heirs. As to which document you should choose should be decided with the advice of your attorney as there are plusses and minuses with each approach.
-- Cartier & Bower are at
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