Planning for Long-Term Disability or Incapacity: Why a Durable Power of Attorney and Advance Medical Directive Matter

Most people who finish their will feel like they’ve checked the estate planning box. They file it away and move on with their lives. But what happens when you’re still alive but can’t make decisions for yourself? A car accident, sudden illness, or stroke can leave you unable to communicate or think clearly. Without the right documents in place, your family faces a tough situation with no clear answers.

A will only works after you die. It doesn’t help your spouse pay the mortgage if you’re in a coma. It won’t tell doctors whether you want life support if you can’t speak. That’s where two other documents come in: a durable power of attorney and an advance medical directive. Together, these papers protect you during a health crisis and spare your loved ones from making impossible choices without guidance.

What Happens When You Become Incapacitated Without These Documents

When someone loses the ability to make decisions, families often discover they have no legal authority to help. Your spouse can’t access your bank account to pay bills. Your adult children can’t talk to your doctors about treatment options. Even simple tasks like depositing a check or filing taxes become legal obstacles.

Without a durable power of attorney, your family must go to court and ask a judge to appoint a guardian or conservator. This process takes months, costs thousands of dollars, and requires regular court check-ins. It’s stressful, expensive, and completely avoidable. According to the American Bar Association, these documents should be created while you’re healthy and can think clearly, not after an emergency happens.

The same problem exists with medical decisions. If you haven’t written down your wishes, doctors may keep you on life support longer than you’d want. Or they might stop treatment sooner than you’d prefer. Your family members might disagree about what you would have wanted, creating conflict during an already painful time. The National Institute on Aging reports that advance directives help make sure your healthcare wishes are followed, yet many Americans still don’t have them.

Understanding Durable Powers of Attorney

A durable power of attorney is a legal document that lets you choose someone to handle your finances if you can’t. This person, called your agent or attorney-in-fact, can manage your money, pay your bills, handle your investments, and make financial decisions on your behalf.

The word “durable” matters here. It means the document stays in effect even when you’re incapacitated. A regular power of attorney stops working the moment you lose mental capacity, which is exactly when you need it most. A durable power of attorney keeps going.

What Your Agent Can Do

Your agent steps in when you’re physically unable to handle your affairs or mentally unable to make sound decisions. This could mean:

• Paying your mortgage and utility bills
• Managing your bank accounts and investments
• Filing your taxes
• Handling insurance claims
• Selling property if needed to pay for your care
• Making decisions about your business interests

You decide how much power to give your agent. Some people grant broad authority over everything. Others limit the agent to specific tasks or accounts.

Choosing the Right Person

Pick someone you trust completely. This person will have access to your money and the power to make big financial decisions. Many people choose their spouse, an adult child, or a close friend. You can name more than one person to share the responsibility or list backup agents in case your first choice can’t serve.

One important rule: you cannot choose your doctor or any medical provider treating you as your agent. This prevents conflicts of interest in your care.

When It Takes Effect

You can decide when your power of attorney becomes active. Some people want it to work immediately, which helps if you travel often or need assistance with finances now. Others prefer a “springing” power of attorney that only activates when a doctor certifies you’re incapacitated.

Advance Medical Directives: Making Your Healthcare Wishes Known

An advance medical directive combines two important healthcare documents. The first part is a living will, which outlines your preferences for medical treatment. The second part is a healthcare power of attorney, which names someone to make medical decisions when you can’t communicate.

Living Will: Your Treatment Preferences

A living will tells doctors and family members what kind of medical care you want in specific situations. It covers decisions like:

• Whether you want CPR if your heart stops
• If you want to be on a ventilator
• How you feel about feeding tubes
• Your wishes about dialysis
• What you want for pain management
• Whether you want to donate organs

These instructions only apply when you can’t speak for yourself. If you can communicate your wishes, you’re always in charge of your own medical decisions.

Healthcare Power of Attorney: Your Medical Decision-Maker

While a living will covers specific treatments, your healthcare power of attorney names a person to handle all other medical decisions. This agent can:

• Talk to your doctors and get detailed information about your condition
• Review your medical records
• Approve or refuse treatments not covered in your living will
• Choose which hospital or facility you go to
• Hire or fire healthcare providers
• Make decisions about experimental treatments

Your healthcare agent should be someone who knows you well, understands your values, and can handle stressful situations. They need to be willing to speak up for your wishes even if they disagree personally.

The HIPAA Release: Giving Others Access to Your Medical Information

Sometimes you want family members or friends to talk with your doctors and get information, but you don’t want them making decisions for you. That’s what a HIPAA release does.

The Health Insurance Portability and Accountability Act protects your medical privacy. Doctors can’t share your health information with anyone unless you give permission. A HIPAA release lets you name as many people as you want who can:

• Receive your medical records
• Talk to your doctors about your condition
• Get updates on your treatment
• Visit you when hospital rules limit visitors to family

This doesn’t give anyone the power to make medical choices. It just opens the lines of communication. You should always include your healthcare agent on this list, but you can also add other trusted people who you want kept in the loop.

Documents Business Owners and Families with Special Needs Can’t Ignore

Business Succession Planning

If you own a business, a standard estate plan isn’t enough. You need documents that explain what happens to your company if you become incapacitated or die. Without these papers, your business interests might end up stuck in probate court while your partners or employees wait for answers.

Key documents include:

• Operating agreements that spell out who runs the business if you can’t
• Buy-sell agreements that control what happens to your ownership share
• Business continuity plans that keep operations running during your absence

These documents protect your business, your employees, and your family’s financial security.

Special Needs Planning for Families with Disabilities

Families with a member who has disabilities face unique planning challenges. A standard will might actually hurt them by leaving an inheritance that disqualifies them from government benefits like Medicaid or Supplemental Security Income.

Special needs trusts solve this problem. These trusts:

• Provide money for care beyond what government programs cover
• Preserve eligibility for Medicaid and SSI
• Pay for things that improve quality of life, like entertainment, education, or travel
• Protect assets for your loved one’s lifetime

Other tools like ABLE accounts and supported decision-making agreements give people with disabilities more independence while protecting their benefits.

Beneficiary Designations and Property Titles: Small Mistakes with Big Problems

Your carefully written will might not control all your assets. Beneficiary designations on retirement accounts, life insurance policies, and payable-on-death bank accounts pass directly to the named person. They skip your will entirely.

This creates problems after major life changes. Common mistakes include:

• An ex-spouse still listed on a 401(k) after divorce
• A deceased parent named on a life insurance policy
• Adult children left off new accounts opened after they were born
• An estranged sibling named years ago who you no longer speak to

Check your beneficiary designations every few years, especially after divorce, remarriage, births, deaths, or falling out with family members.

Property Deeds and Real Estate

Your house might not pass the way you think. Real estate causes problems when:

• Property titles list owners incorrectly
• Deeds were never properly recorded at the courthouse
• Transfer-on-death deeds weren’t completed
• Real estate wasn’t transferred into your trust

Families assume the house will pass smoothly according to the will. Instead, they face probate complications because the property wasn’t titled correctly. Review your property deeds with an attorney to make sure everything aligns with your estate plan.

Creating Your Documents: Steps That Protect Your Family

Step 1: Choose Your Agents

Pick at least two people for each role. Your first choice might be unavailable when needed, so having backups prevents delays. Consider:

• Financial agent for your durable power of attorney
• Healthcare agent for your medical decisions
• Successor agents who step in if your first choice can’t serve

Have honest conversations with these people before you name them. Make sure they understand your wishes and feel comfortable with the responsibility.

Step 2: Write Clear Instructions

Your documents should include:

• Your full name, birth date, phone number, and address
• Contact information for all agents and backups
• Specific instructions about your wishes
• Any limitations on what your agents can do
• Your preferences for medical treatment in different scenarios

Many people work with an attorney to create these documents, either alone or as part of a complete estate plan. An attorney makes sure your documents meet your state’s legal requirements and actually work when you need them.

Step 3: Make It Legal

Most states require you to sign your documents in front of witnesses or a notary public. Some states need both. Follow your state’s rules exactly, or your documents might not hold up when your family tries to use them.

Step 4: Share Copies and Keep Them Accessible

Give copies to:

• Your named agents
• Your doctors and healthcare providers
• Close family members who should know your wishes

If you don’t want to hand out copies to everyone, at least tell your agent and family where to find the originals. Keep one copy at home in an obvious place and another with your attorney.

Step 5: Update Every Three Years

Healthcare providers and financial institutions often want to see recent documents. If your power of attorney is ten years old, they might question whether it still reflects your wishes. Three years is a good rule for updates.

Also review your documents after:

• Marriage or divorce
• Birth or adoption of children
• Death of a named agent
• Moving to a new state
• Major changes in your health or finances
• Falling out with someone you previously trusted

Changing or Canceling Your Documents

You can update your durable power of attorney and advance medical directive anytime your situation or wishes change. If you want to create new documents, you need to revoke the old ones first.

Ways to cancel your existing documents:

• Destroy all copies physically
• Sign a written statement that revokes them
• Tell someone verbally that you want to cancel them
• Create new documents that specifically revoke the old ones

Make sure everyone who received copies of your old documents knows they’re no longer valid. Give them copies of your new documents or written notice of the revocation.

Why Waiting Until You Need These Documents Is Too Late

You can’t sign a power of attorney or an advance medical directive after you lose mental capacity. By then, it’s too late. Your family is stuck going to court instead.

These documents give you control over what happens during the hardest moments of your life. They tell your family exactly what you want, so they don’t have to guess. They protect your money from being frozen. They make sure your medical care matches your values.

Most importantly, they lift a massive burden off your loved ones. Instead of fighting with hospitals, banks, and courts, your family can focus on supporting you and making the most of your time together.

If you don’t have these documents yet, now is the time to create them. If your documents are more than three years old, schedule a review to make sure they still work for your current situation. If you own a business or have a family member with special needs, make sure your planning addresses those unique challenges.

Don’t leave your family scrambling during a crisis. A few hours of planning now can save them months of stress, thousands of dollars, and countless difficult decisions later. Reach out to our estate planning attorney at Johnson May in your area, who can help you create documents that actually work when your family needs them most.