The Greater Estate Plan, Part 1
Joe Plumber pulls up to his 10 a.m. appointment at 10:30. It’s early in the day and he’s already running late. The woman who lives there points him to the problem pipe in the bathroom. He hurries in and gets to work. Partway through the job, water begins gushing all over the floor. As he gets to his feet to shut the main off, he slips and hits his head on the bathroom sink. Joe is knocked unconscious.
At the hospital, Joe is still unconscious. The staff need someone to make a decision about Joe’s treatment. Who can they ask? Who has the authority to make this decision?
An “estate plan” includes more than just a will. A will is an integral part of an estate plan, but it has its limits. A will cannot decide whether to “pull the plug” on a mother who hasn’t woken up after a car accident. A will cannot decide whether to perform CPR on a nursing home resident who has stopped breathing. And a will definitely cannot manage the finances of a person suffering from dementia.
Fortunately, the law has a way to handle these kinds of situations. It just requires a little advanced planning. Two kinds of documents are used for this advanced planning: the Advance Medical Directive, and the Durable Power of Attorney.
Both documents operate on the principle that one person can appoint another person to act on his or her behalf. We see this all the time in professional sports and in Hollywood, where athletes and actors have agents to deal with others. While Joe Plumber may not be an athlete or an actor, he can still appoint an agent to act on his behalf and to make decisions for him.
What’s the difference between these two documents? Broadly speaking, Advance Medical Directives are used to appoint agents to make health care decisions, and Durable Powers of Attorney are used to appoint agents to make financial decisions.
In the posts that follow, we will explore both of these documents in more detail.