Preparing a will is an important step if you want to ensure your family is taken care of after you die. However, it’s not the only legal document you should have.
At Addition Financial, our members often come to us with questions about their finances. One question that we hear a lot is this:
What are the differences between a living will and a durable power of attorney?
That’s an important question because these two documents are often confused with one another. Since each serves a separate purpose, it’s essential that you know the differences. With that in mind, here are eight differences between a living will and a durable power of attorney.
#1: A Living Will Provides Direction for Medical Choices
A living will is a legal document that clarifies your wishes for medical care and decisions about your health in the event that you are unable to communicate them.
David Reischer, Esq., is an estate attorney and the CEO of LegalAdvice.com. He told us:
“Living wills and other advance directives are written, legal instructions regarding your preferences for medical care for circumstances when and if a person is unable to make decisions for oneself. Advance directives guide choices for doctors and caregivers for the terminally ill, seriously injured, in a coma, in the late stages of dementia or near the end of life. A 'living will' is an important document because it allows a person to make their intent known in anticipation of a possible future moment for when intent cannot be communicated.”
It’s common for older people or people with degenerative diseases to make living wills, but everybody should have one. It’s the best way to ensure your wishes are known. If you’re married and do not have a living will, it will be left to your spouse to decide what you might want in any given situation. Most people have strong preferences about whether they want to be put on life support, for example. Without a living will, your wishes may not be honored.
#2: A Durable Power of Attorney Empowers Someone to Make Financial or Medical Decisions on Your Behalf
Medical decisions are not the only decisions that you might be unable to make if you are sick or injured. Financial decisions are also necessary and it’s a good idea to designate someone to make both types decisions on your behalf if you’re not able to do so.
That brings us to the durable power of attorney. A power of attorney provides a designated person to act as your proxy in medical or financial decisions. According to Mary Kaplan, an attorney and the CEO of The Kaplan Firm, your financial proxy can:
- Pay bills on your behalf
- Sell property on your behalf
- Liquidate your assets
- Pay for any medical care you might need out of your assets
Designating a person to handle financial decisions is a good way to prevent squabbles over money or uncertainty about who will handle your financial affairs if you are unable to do so.
A medical power of attorney works the same way. It designates a proxy to make medical decisions (in accordance with your living will) on your behalf if you are unable to do so. Since not every contingency can be spelled out in a living will, conferring a medical power of attorney on a proxy ensures that someone is empowered to make decisions about your medical care if it becomes necessary.
#3: A Living Will Involves Making Decisions About Care Ahead of Time
It’s not possible to predict the future or see every possible scenario that might affect your health. However, when you create a living will, you must make some big picture decisions about what kind of health care you want at the end of your life.
In a living will, you might specify:
- Whether you want a feeding tube if you can’t eat on your own
- Whether you want to be kept alive with a ventilator or other life support
- What measures, if any, should be taken to save your life
Your living will should be explicit in spelling out what you want and what you don’t. That way, your family won’t be left to interpret your wishes or to impose their own on you. You can be sure that, by making the big decisions ahead of time, your wishes will be honored.
#4: A Power of Attorney Confers a Legal Responsibility
Both a living will and a durable power of attorney are considered to be advance directives, that is, they are legal documents that specify what will happen in the event you are unable to manage your own affairs. However, a power of attorney confers a legal and fiduciary responsibility on the person you designate as your proxy.
What that means is your proxy has a legal obligation always to act in your best interest. They can’t use your money irresponsibly or neglect their duties as your proxy by ignoring bills.
It’s important to note that the same rule applies if you designate a medical proxy. The person you designate must make medical decisions in your best interest and must also adhere to any specific wishes in your living will.
#5: Power of Attorney May be Limited or Durable
There is more than one way to create a power of attorney. You may decide to designate a temporary proxy in a situation where you know you will be incapacitated – for example, if you’re having major surgery and will be out of commission. Mary Kate D’Souza of Gentreo told us:
“Usually the Power of Attorney goes into effect the day it is executed, You can choose to limit it in time or make it durable.”
What she means is that you might decide to designate a temporary medical proxy to handle decisions that arise while you are in the operating room or in recovery and unable to communicate your wishes. In this situation, the power of attorney might be good for a day or two, or for a week, and would expire at the end of that time.
By contrast, a durable power of attorney is open ended. It has no effect unless you become incapacitated. Incapacitation might occur as a result of:
- An accident
- Major surgery
- A medical event such as a stroke
The benefit of having a durable power of attorney is that it will be there if you are unexpectedly incapacitated.
#6: A Power of Attorney Covers More Contingencies Than a Living Will
One of the biggest differences between a living will and a durable power of attorney is that a living will typically applies only to end-of-life decisions such as those we’ve mentioned above, including DNR orders and life support. By contrast, a durable power of attorney covers all medical decisions that may be necessary, including surgery and medication.
For that reason, it is recommended that you prepare and execute both documents. The living will is designed to cover specific big-picture health decisions at the end of your life, and the power of attorney covers decisions that arise at any time. Having both minimizes the chances that your family will be left wondering what to do if you can’t make decisions on your own behalf.
#7: Medical Professionals Will Decide if You Are Incapacitated
Another key difference between a living will and a durable power of attorney as it relates to financial matters is who decides when or if you are unable to make decisions on your own behalf.
With a medical power of attorney or living will, it is up to medical professionals to determine if you are incapacitated. Sometimes these decisions will be simple. For example if you are in a coma, there won’t be any debate about your ability to make decisions.
In the case of a financial power of attorney, doctors will still make recommendations about whether you have the capacity to make decisions. The only reason a decision would involve another party, such as a judge, would be if the power of attorney were disputed by family members.
#8: A Living Will Doesn’t Designate a Proxy
The final key difference between a living will and a power of attorney is that the former does not typically specify a proxy to handle end-of-life decisions. That’s an important distinction if you have someone you trust to make decisions.
When you designate a proxy, we recommend talking to the person ahead of time to make sure that they’re comfortable handling medical decisions on your behalf. You should make sure to spell out your wishes and ask if they have any objections to honoring them. If they do, you should appoint a different proxy whom you can trust to heed your directives.
When you’re preparing end-of-life documents and advance directives, it makes sense to have both a living will and a durable power of attorney. That way, your wishes will be honored and you can be confident that you know who is making decisions on your behalf.
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