Did you know a will isn’t enough to protect your wishes and your future? A will applies after your death, but what happens if you become physically or mentally incapable of handling your affairs? This is where an Enduring Power of Attorney and a Personal Directive come in.
Enduring Power of Attorney vs. Personal Directive
An Enduring Power of Attorney and a Personal Directive are similar, but they’re not the same. They both apply when you become incapacitated, but they pertain to different aspects of your life.
An Enduring Power of Attorney is strictly for financial matters and a Personal Directive covers all non-financial matters, such as health care, medical needs, living arrangements, and dependents.
What is an Enduring Power of Attorney?
An Enduring Power of Attorney sets out instructions for someone else to manage your property and/or financial matters, such as
- Banking (deposits and withdrawals),
- Canceling services (such as utilities),
- Applying for and maintaining government benefits,
- Paying bills, and
- Managing property, assets, and investments.
There are two types of Enduring Power of Attorney:
- Springing or Contingent Enduring Power of Attorney comes into effect when a medical doctor officially declares you incapacitated. You set this up in advance so that if/when the time comes, everything is already in place for a smooth transition.
- Immediate Enduring Power of Attorney is effective immediately. A common situation that warrants this type is when a senior finds managing their financial affairs too difficult, and they want their children to handle things like banking, filing taxes, paying bills, etc.
Many Albertans are surprised to learn that decision-making or managerial authority doesn’t automatically transfer to a spouse or child when a person becomes incapacitated. Even a spouse or child may have to go to court to get permission to take over these matters.
When you die, your will takes effect and the Enduring Power of Attorney ceases. The Enduring Power of Attorney can also be revoked if you regain your capacity to make decisions and manage your financial matters.
What is a Personal Directive?
A Personal Directive is often referred to as a living will. It sets out instructions for someone else (one or more trustworthy loved ones you appoint) to manage your personal, non-financial decisions, such as
- Health care,
- Medical procedures,
- Care and education of dependents,
- Information related to cultural preferences and religious beliefs, and
- Living arrangements.
If you become ill or injured and unable to communicate and make important decisions—for example, if you develop dementia—your Personal Directive appoints someone as your representative and describes your wishes about things like end-of-life care, resuscitation, or pain medication.
Your Personal Directive goes into effect only after a capacity assessment by a physician or psychologist determines you to be incapable of decision-making.
When you die, your will takes effect and the Personal Directive ceases. Your Personal Directive can also be revoked if you regain your capacity to make decisions and manage your personal matters.
Do I need both an Enduring Power of Attorney and a Personal Directive?
If you want to protect your wishes after your death, you create a last will and testament. But if you want to protect your wishes in life if you become incapacitated, the best and most comprehensive approach includes both an Enduring Power of Attorney and a Personal Directive.
If you only set up an Enduring Power of Attorney, your financial matters will be taken care of, but your personal matters will be left to the court-appointed decision-maker. If you have preferences about medical treatment, living arrangements, or any other personal matters, you need a Personal Directive.
If you only set up a Personal Directive, your personal matters will be taken care of, but your financial matters will be left to the court-appointed decision-maker without any direction from yourself.
An Enduring Power of Attorney and a Personal Directive work together to simplify decision-making for your loved ones. They don’t have to guess about what you would want, and with the authority to handle financial and other matters, their role in a stressful situation is much less complicated.
Protect Your Wishes & Your Future
No one likes to think about the possibility of developing dementia or becoming incapacitated in any way. But preparing for the possibility can eliminate much of the anxiety surrounding it. When you know your finances and your personal matters will be handled according to your own wishes, there’s a lot less to worry about.
Taking the time to set out your wishes on important matters and for situations that may or may not ever happen can put your own mind at ease, but it’s also a gift to your loved ones. If you ever become incapacitated, your loved ones will have enough to think about without trying to figure out what you would want them to do.
While an Enduring Power of Attorney and a Personal Directive are about what you want, it’s highly recommended that you consult an estate planning lawyer to help you draft these documents in a way that’s best for you and your situation.
The law firm of Getz Collins and Associates is ready to guide you through the legal process of estate planning. We can assist you in establishing an Enduring Power of Attorney and a Personal Directive. Contact us today to get started.