Why You Need Powers of Attorney and an Advanced Medical Directive
by Kaamil Khan
Estate Planning is more than just “death and taxes,” additional steps should be taken to fully protect you and your estate. For all estate plans prepared by K.M. Khan Law, a client is also provided with two additional documents: a Durable Financial Power of Attorney and a Healthcare Power of Attorney with an Advanced Medical Directive. Although the hope is that these documents will never have to be utilized, they are absolutely necessary to have complete and thorough protection for your estate.
Durable Financial Power of Attorney
The primary reason to have a Durable Financial Power of Attorney (POA) is to avoid the need for a guardianship and conservatorship proceeding, which can be a truly heart-wrenching affair. Your family and loved ones must ask the court to judge you to be mentally insufficient and physically incapable of handling your own affairs; a public hearing for an incredibly private matter. Once this determination has been made, a guardian at litem must be hired or appointed by the court. This person is then paid from the property and proceeds of your estate thereby reducing what may be available for your designated beneficiaries at your passing.
By creating your own POA when you are of sound mind and fully cognizant, you choose the individual you would like to have manage your affairs rather than have the court decide for you. You may also set this person’s compensation, if any is owed, instead of relying on the rates charged by a professional, such as an attorney, or under the fee schedule approved by the court.
While married people in Virginia do have equal management and authority over their joint assets and obligations, marriage by itself will not designate one spouse to fully act for the other, especially when dealing with accounts held in an individual’s name. Under current privacy laws, insurance companies and financial institutions cannot discuss your personal affairs with someone other than you. With a valid POA in place, your spouse as your designated agent will then be fully authorized to act on your behalf with these institutions as well as pay your bills, file an individual tax return, or apply for government benefits such as Social Security, Veteran’s Administration, Medicare, or Medicaid.
Finally, creating your POA ahead of time will provide peace of mind to your family and loved ones. The POA allows your family to easily manage your affairs if something tragic were to happen rather than try to determine a possible solution while being overcome by grief and emotion.
Healthcare Power of Attorney and Advanced Medical Directive
The Healthcare Power of Attorney and Advanced Medical Directive (AMD) actually consists of two parts: a healthcare power of attorney and a “living will.” You have the right to make your own health care decisions. An AMD can help you communicate these choices when you are unable to – if you are in a coma or suffering from a serious injury or illness.
Such a document is not just for older individuals; a serious illness or catastrophic injury can happen unexpectedly at any age. And unlike the POA described above, your agent under your AMD will only be able to act when you cannot make medical decisions for yourself. Therefore it is vital that your AMD is clear and direct so your agent can make your treatment preferences the way you would if you could. This means that your AMD should incorporate your values, goals, religious views, and wishes. Your healthcare agent under your AMD should also be someone who completely and fully understands how you would like your decisions to be made.
Similar to situations where there is no POA, not having an AMD will require your family and loved ones to have to suffer through another guardianship proceeding. Virginia law then sets out the people who would make these healthcare decisions for you: your spouse if still married, your adult children, your parents, and finally your adult siblings or other relatives. For same-sex or unmarried couples, a partner or significant other will have no legal standing to act on your behalf. If no person authorized by law is available, a stranger appointed by the court might have to decide what treatment is best for you. Therefore, not having an AMD can create resentment and fighting amongst your own family and arguments over what you want.
The most important feature of both the POA and the AMD is that you maintain control. You choose your agents, their powers, compensation, and what your choices are or could be. The hope is that you never have to use these documents as they only apply in the very “worst case scenario.” However, by being prepared in advance, your wishes are in writing instead of the court or the law making these choices for you. These documents are clear and speak for themselves.
If you have questions regarding how your wishes can be set forth using the POA or an AMD, K.M. Khan Law is here to provide the answers. Contact the firm today.