We tend to think of living wills, health care proxies, and durable powers of attorney as older persons’ issues, but most of the highly charged cases involving end-of-life issues have centered around young people who made headlines for a short period of time. Consider past cases such as Karen Ann Quinlan, Nancy Cruzan, and Terri Schiavo — these young women were left disabled without any instructions about their care beyond hazily recalled details of statements they made in their teens or in their twenties.
Older people may be less in the news when it comes to healthcare issues because older individuals tend to have established plans for dealing with end-of-life issues. Often, these plans are developed as part of an estate plan, where individuals arrange healthcare directions, trusts, and durable powers of attorney, in addition to the preparation of a will. But the examples of Quinlan, Cruzan, and Schiavo show that estate planning doesn’t have to be exclusively for those of older age.
Let’s examine each of these choices — which supplement your will — to see which might be right for you.
Healthcare directions are generally spelled out in either a living will or — in states where a living will is not recognized — by a health care proxy. In some states these arrangements are designated as a Power of Attorney for Healthcare.
A living will goes into great detail about how you want to be treated by your physician and your hospital if you are totally disabled with no hope of recovery. Perhaps you’re moving your residence to an assisted living facility or nursing home, or your life is in danger in a hospital — the facility, nursing home, or hospital will likely not admit you without a living will, or a similar document.
Well-aired cases have made individuals more aware of what they might want to have in a living will, particularly terms dealing with resuscitation on the failure of our heart or lungs, as well as tubes and machines providing food, water, and a steady but externally assisted heartbeat.
A health care proxy is closely akin to a living will, but with a health care proxy you name an individual to make healthcare decisions for you. Your health care proxy may address your preferences for end-of-life care, but the person you name as your “proxy” is the person who will step into your shoes to make the decisions you would have made if you remained able.
Outside of caring for your body, less publicized arrangements like a trust and a durable power of attorney aim to take care of your finances in the event you can’t keep your financial books yourself.
A trust allows you to specify how your assets will be handled during your lifetime, including during any period of disability. In a trust, you name a trustee; you can even be your own trustee. In the trust, you also name a successor trustee — an individual, bank, or other trust institution — to take care of your financial affairs on your disability or death.
Arranging a trust does not do much to protect your assets during your lifetime if you do not take one further step and “fund” your trust. Funding your trust involves placing assets right into your trust, changing the name of bank accounts, securities and real estate from your name to the name of your trust. So, when funding a trust the accounts would no longer list the owner as “John Q. Sample,” but rather the “John Q. Sample Trust.” Generally this trust will be revocable, so nothing is lost placing assets right into your trust.
You may still be somewhat protected if you do not have a trust (or if the trust is not funded) as long as you have a durable power of attorney. Powers of attorney generally protect our finances, much like a trust. In most states you can have a power of attorney in which you name:
Until the concept of a “durable” power of attorney came about, powers of attorney became invalid on disability. But with fairly recent durable power of attorney statutes, you can now prescribe that a power of attorney will survive your disability.
Durable powers of attorney have two shortcomings when compared with the protection of a trust:
Finally, living wills, health care proxies, and durable powers of attorney should remain accessible to your family. Copies and even duplicate originals are often left with the person named to care for you or your finances, but you might also send copies to your physician; a priest, rabbi or minister; and one or more of your children. A safe deposit box is probably the hardest place to reach on your disability, so this may be the worst place to keep these documents.
Generally a will should not be executed in duplicate, and an original will is probably best kept out of a safe deposit box too, since a will should be read within hours of a death.
So when you arrange a will, explore the prospect of arranging a living will or a health care proxy to care for your body, as well as a durable power of attorney and a trust to protect your finances. Then go about your daily chores, and with good fortune these documents will gather dust in a closet and they will remain there forever, no more than just another insurance policy, useful only should the need arise.
To learn more about how to save for retirement, Ask a Citizen at your nearest Citizens Bank Branch.
Disclaimer: Views expressed may not necessarily reflect those of Citizens Bank. The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation. You should do your own research and/or contact your own legal or tax advisor for assistance with questions you may have on the information contained herein.