Our New Mexico Incapacity Planning Attorneys frequently receive questions about the basic distinctions between a durable power of attorney, advance health care proxy, and a power of attorney (i.e. non-durable). These documents all provide important protections for those who suffer incapacity. However, they have unique requirements and functions so effective estate planning entails an understanding of how these documents differ in terms of the authority they grant and the function that they serve. We have provided an overview that highlights the unique function of each document in this blog post.
Advance Health Care Proxy:
This incapacity planning document authorizes someone you appoint to make specific types of decisions about your medical treatment if you are incapacitated or not competent to do so. While this document is similar to a “living will,” it is not precisely the same. An advance health care proxy involves appointing an agent to make the types of medical decisions authorized by the document whereas a living will sets forth specific directions and wishes that medical professionals are to observe regarding extraordinary life-sustaining methods. While an advance health care proxy enables an agent to make these decisions, a living will provides a means for you to give instructions to your doctors about use of tubal hydration and nutrition, artificial resuscitation, and similar forms of life-sustaining medical treatment.
Durable Power of Attorney:
While an advance health care directive focuses on medical treatment, a durable power of attorney authorizes an agent to act in your place to manage your financial affairs in the event you suffer from incapacity. The scope of the authorization can be customized based on your comfort level and preferences, but the goal is to ensure that someone you trust is empowered to manage your financial affairs if you are medically unable to make these decisions. The document must expressly indicate that it is to remain in effect in the event of your incapacity. This language regarding the “durable” nature of the power of attorney is important so that the document provides the intended protection at the critical time.
Power of Attorney (non-durable):
This document is used to appoint an agent to engage in financial or business matters on your behalf, but the grant of authority does not survive your incapacity. A power of attorney is usually intended to appoint an agent to act in a fiduciary capacity to sign contracts, complete real estate transactions, access bank accounts, and similar functions. While the authority can be plenary or extremely limited, it is important that it be carefully drafted so that it grants the powers you wish to authorize while withholding those that you are not comfortable extending to the agent.
The above information is designed solely to illustrate general principles of law, and does not constitute a specific legal opinion on individual cases. We suggest that you contact experienced legal counsel for a specific opinion tailored to your individual circumstances.
Our experienced New Mexico Estate Planning Attorneys at Jay Goodman & Associates, PC offer a free consultation in our centrally located offices in Santa Fe and Albuquerque so that we can discuss your specific situation. Call us today to schedule your free consultation at (505) 989-8117 to learn about your rights and options.