Will, Power of Attorney, and Living Will: What Are They and Do I Need Them?
Almost everyone, during their life will have some interaction with the basic tools of estate planning: namely, a Will, a Power of Attorney, and a Living Will. This article will discuss each of these basic tools and why it is important to consult with an attorney who can guide you with regard to your specific needs.
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Wills
A Will is a written document which identifies who will receive your money, your property, and your assets after you die. A Will is the primary way most individuals can decide “who gets what” after they die. This includes not only family and friends but such things as gifts to charities and religious organizations.
If you die without a Will (called “intestate”), the government, through a specific law that varies by State, called the intestacy law, decides who gets your property. Often this is your surviving spouse or surviving “issue” (children, grandchildren and so on) but can vary depending on which members of your family are alive when you die. Although certain variations do exist from state to state, in general, the order in which family members inherit is: parents, spouses/children, brothers/sisters, nieces/nephews, grandparents, and then aunts/uncles. This situation can be avoided with a properly executed Will, by which property can pass not only to one’s family, but to any person or any entity to whom the person making the Will (called the “testator”) desires.
In addition to directing who gets an individual’s property, a Will can specify who does not get property or who does not get property directly. This may be of great importance in situations where individuals who might otherwise inherit (by will or by intestacy) are incompetent to manage their own affairs whether because of physical disability, mental or emotional incapacity, youth or because they are subject to the influence of designing persons or even drugs or alcohol.
Additionally, a Will can create a Trust (called a “Testamentary Trust”) and appoint a Trustee, who would then manage any inherited money or property for the benefit of such a minor child, or disabled or incapacitated person.
A Will is vitally important if you have children under the age of 18 because in your Will you can appoint a Guardian who will be the person responsible to care for your children if you (or you and your spouse) both were to die.
A Will can also designate an Executor or Executrix who is charged with managing the estate by paying any debts and transferring the remaining assets of the estate to the beneficiaries.
A consultation with an attorney would be useful to find out how the above general information would specifically apply to you.
Living Will
The term “Living Will” is commonly used, albeit inexactly, to refer to a class of healthcare related documents which also includes a “Declaration,” an “Advance Medical Directive,” an “Advance Health Care Directive,” and a “Healthcare Power of Attorney.” The basic purpose for all of these documents is similar. They all involve methods of informing and directing doctors and other members of the medical profession of which treatments and procedures you do or do not want to be used, if you are in a hospital, in a terminal condition or a state of permanent unconsciousness, and cannot speak or otherwise communicate for yourself.
The form of the Living Will, the Declaration and the Advance Health Care Directive each are very similar to the others. Each of these documents provides an individual the ability directly to communicate their treatment wishes to their doctor. Most commonly, these documents are used to clarify which treatments and procedures an individual does not want to receive when confined in a hospital with no realistic prospect of recovery.
These documents also typically appoint a “healthcare agent” or “healthcare surrogate” to direct doctors expressly to follow the individual’s previously recorded treatment wishes. Making healthcare decisions for another, which may include choices between life and death, may well become difficult and stressful. Common choices for this position include a spouse, an adult child, another family member or a very close friend. In all cases however, it is critical to choose an agent or surrogate who is mature, emotionally stable and strong, who knows you well and can be trusted to follow your wishes.
These healthcare documents are available for the benefit of individuals seeking peace of mind that they will not be kept alive, indefinitely, in a vegetative state. It is important to remember, however, that if an individual is awake and able to communicate, that his or her wishes always will supersede the directives of any written documents.
Finally, everyone should be aware that if you have not executed one of these healthcare type documents, all doctors and healthcare providers are ethically and legally obligated to administer all available and medically indicated treatments and procedures, indefinitely, whether or not you are in a vegetative state.
Although there are plenty of cheap estate planning forms which can be purchased online or at stores, you get what you pay for. Off-the-shelf Wills, Powers of Attorney, and Living Wills cannot substitute for the informed professional judgment of a New Jersey licensed lawyer. To make sure that your particular situation is handled correctly, so that you have the greatest peace of mind, consultation with an attorney is key.
Power of Attorneys
A Power of Attorney (“POA”) is a document by which one person (the “Principal”) authorizes another person (the “Agent”) to take various actions on the first person’s behalf. POAs are used for a variety of purposes and in a variety of contexts.
A POA could be used for very limited purposes. This is known as a “Special” or “Limited” POA. For example, a Principal could authorize her Agent to take action regarding only a single real estate or banking transaction. On the other hand, a Principal could issue a very broad POA permitting the Agent to handle any aspect of the Principal’s business or personal matters. Such a broad POA is referred to as a “General” or “Durable” POA.
By far the most common type of POA, useful to the largest number of people, is known as a “General Durable Power of Attorney”. As a General POA, it grants very broad current powers to the Agent. In addition, however, as a “Durable” POA the Agent may continue to act on behalf of the Principal even after the Principal has become mentally or physically incapacitated such that she cannot act on her own behalf. This is a very important and useful capability. For example, if an elderly person becomes incapacitated by Alzheimer’s disease or other dementia, a child or other caregiver possessing a General Durable POA can perform necessary tasks, such as banking, authorization of medical care, and management of governmental services, which would be impossible to do without the POA.
Indeed, not having a Durable POA has on countless occasions prevented family or friends from taking needed action on behalf of an incapacitated person, and necessitated expensive and time-consuming court action to receive permission to act on the incapacitated person’s behalf.
Finally, it is important to remember that a POA is a powerful tool which can and has in the past been subject to abuse. On far more than one occasion, an Agent under POA, whether a family member, friend or hired professional, has wrongfully acted to advance the Agent’s personal interests to the detriment of the interests of the Principal. Accordingly, while a POA typically establishes a convenient, useful, and often necessary, way to take action for the benefit of the Principal, it is of the utmost importance to select an Agent under POA who will be readily available and who is reliable, honest and trustworthy.