Individuals preparing their estate plans sometimes focus on the documents that will govern what happens to the possessions they leave behind and how loved ones will be cared for after they are gone. Many estate planners establish trusts to ensure their assets will be passed on to family members or used to benefit their favorite charities, and most people who develop an estate plan create a Last Will and Testament. However, estate planning may also be used to designate trusted parties to make medical and end of life decisions on the planner’s behalf if they are unable to communicate or make those determinations on their own behalf. Two of the main estate planning tools used for these purposes are a power of attorney and a living will. These documents serve distinct yet related functions, and a single individual may establish either one, or choose to create both and use them in combination to take into account the broadest possible range of foreseeable outcomes. To learn more about the differences between a power of attorney vs. living wills, reach out to an experienced Arizona estate planning attorney with Harrison Law, PLLC by calling (480) 320-2310 today.
What Is a Power of Attorney?
Laypersons frequently use the term “power of attorney” somewhat loosely, to refer both to the individual who holds the power in question and the document that grants that authority. Technically, however, a power of attorney is a legal document. One individual, the principal, drafts this document in order to grant another individual, who may be known either as the principal’s agent or as their attorney-in-fact, certain decision-making powers, delineated in the document. The State of Arizona specifies some limits regarding who can be named as a power of attorney for financial decisions, excluding a person “other than a natural person” from valid execution of a power of attorney under the template language that otherwise applies under § 14-5501 Ariz. Rev. Stat. (2023).
These powers can vary widely in scope, but in general they will fall into one of two broad categories, with a medical power of attorney document establishing authorization for a range of decisions related to health care, and a financial power of attorney authorizing the agent, or attorney-in-fact, to conduct financial transactions on behalf of the principal. Both types can be delimited by duration as well as by the range of decisions covered.
Financial Power of Attorney
A financial power of attorney can be durable, meaning it lasts for life or until revoked, or it can be designed to expire, either on a specific date or once a set of circumstances delineated in the document no longer obtain. This flexibility means that a financial power of attorney can be used for both long-term future planning and short-term purposes.
Given the nature of the powers conferred, a financial power of attorney can be especially susceptible to abuse by unscrupulous agents. To guard against the potential for financial power of attorney abuse, it is important to make sure the individual named as agent is fully trustworthy. Applying carefully specified limits, both in scope and duration, can also help to mitigate the risk of possible abuse. In addition, because mistakes as well as malfeasance can cause costly problems, individuals considering a financial power of attorney arrangement may wish to consider choosing someone with significant experience in handling financial matters, such as a business attorney or financial adviser. If you have questions about how to choose an agent for your financial power of attorney, consider consulting with a seasoned Arizona estate planning attorney with Harrison Law, PLLC.
Medical or Health Care Power of Attorney
Like its financial counterpart, a medical power of attorney can establish an expiration date that will apply regardless of the circumstances, or it can be written so as to authorize the agent to make medical decisions on the principal’s behalf only so long as certain conditions are in play. Generally speaking, the most common condition for activating a medical power of attorney is the principal’s incapacity, which in turn may be short-term (as when an individual is undergoing a medical procedure that requires anesthesia) or extended in duration (as when the principal is rendered comatose by injury, or disoriented due to a long-term illness such as dementia).
What Is a Living Will?
Like a power of attorney, a living will is a legal document. Unlike a power of attorney, however, a living will does not grant someone else the authority to make decisions on the principal’s behalf; rather, a living will is used to express the preferences of the person who creates and signs the document regarding medical interventions and, if the occasion arises, end-of-life care, in the event that the individual is unable to communicate these preferences in “real time” on their own behalf. In other words, a living will is a form of advance directive that allows someone to indicate their position on a range of predictable decisions ahead of time. Living wills commonly provide medical personnel with an individual’s preferences on such matters as:
- Breathing Assistance
- Supplemental Feeding
- Medications and Treatments
- Palliative Care
- Bodily Donations
A living will does not require an agent, but individuals who prepare living will may wish to ensure that their primary care providers, as well as any other parties who are likely to be involved in end-of-life care, have a copy of the living will on file.
Will My Power of Attorney Expire?
A “durable” financial power of attorney generally refers to one which remains in effect even when the principal is incapacitated. To be durable, a financial power of attorney in Arizona will need to clearly establish the principal’s intent for the power of attorney to continue through incapacity, pursuant to the requirements of § 14-5501 Ariz. Rev. Stat. (2023). However, § 14-5507 specifies that these same requirements for durability do not apply to health care directives executed under Title 36, which governs public health and a variety of matters related to both medical practice and end-of-life arrangements.
Under § 36-3223 Ariz. Rev. Stat. (2023), a health care power of attorney is designed to be in effect precisely while the principal is incapacitated and unable to make their own decisions; in other words, while a financial or “general” power of attorney requires specific language to remain durable during the principal’s incapacity, a health care or medical power of attorney takes incapacity as the condition under which the authorization takes effect.
Health Care Power of Attorney Vs. Surrogate
Arizona law provides a number of avenues by which health care providers can attempt to ensure that they are acting in accordance with a patient’s wishes, and by which individuals can indicate their preferences in advance or designate others to make decisions on their behalf that their advance directives may not have anticipated and specifically addressed. One of these avenues is the designation of a “surrogate” decision-maker for medical situations.
A health care surrogate serves a function similar to that of a health care or medical power of attorney. However, the term surrogate, as used in Title 36, has a broader application. If the individual in question has executed a valid power of attorney for health care according to the state’s requirements, then this agent is treated as the health care surrogate. However, a surrogate may also be a guardian designated by an Arizona court for the specific purpose of navigating decisions related to the individual’s health care and medical needs. In the event that neither a valid power of attorney nor a designated guardian is found, then health care providers are required to make an attempt to locate another appropriate surrogate to make medical decisions, according to an order of priority established under § 36-3231 Ariz. Rev. Stat. (2023).
Living Will vs. Health Care Power of Attorney in Arizona
According to § 36-3261 Ariz. Rev. Stat. (2023), a living will can be incorporated in a power of attorney. In this instance, § 36-3262 Ariz. Rev. Stat. (2023) explains that the agent will be responsible for ensuring that whatever decisions they make on the principal’s behalf remain in keeping with the preferences established in the living will.
On the other hand, state law also provides an option for living wills to be drafted as separate documents used in addition to powers of attorney, or for the specific purpose of disqualifying someone who might otherwise be called upon to act as a health care surrogate under § 36-3231. If the living will is prepared as a standalone document, it will need to be verified according to the same criteria for validity applied to a health care power of attorney under § 36-3221 Ariz. Rev. Stat. (2023).
Choosing Between Power of Attorney vs. Living Will?
Individuals making their estate plans should consider incorporating a living will as well as both financial and health care powers of attorney. Each of these documents can serve a specific function, and together they comprise a robust suite of estate planning tools. To discuss your estate planning needs and goals, or to get started drafting your power of attorney and other estate planning documents, reach out to a compassionate and knowledgeable estate planning lawyer with Harrison Law, PLLC today. Call (480) 320-2310 to schedule your personalized consultation.
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This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
