Advance Directives: Planning Ahead

By Cooley A. Arroyo

Estate planning gives individuals the peace of mind that comes with knowing that their wishes will be carried out at the end of life. A robust estate plan doesn’t simply determine “who gets what.” It also includes advance directives, a vital component of estate planning that gives a person the power to choose who will make vital decisions regarding health, personal finances, and medical care in the event of a period of incompetence or an emergency at the end of life.

Advance directives create an agency relationship whereby a principal appoints an agent to act on his or her behalf. The advance directive document outlines the authority that the agent has in executing this obligation. This post focuses on three of the most common types of advance directives.

General Power of Attorney

With this advance directive, a principal appoints someone to serve as his attorney-in-fact to act on his behalf in matters regarding finances, assets, and property. Though the principal can limit what the agent may do on his behalf, this directive often authorizes the agent to buy and sell property, file tax returns, access bank accounts, and otherwise manage assets on the principal’s behalf. Note that this arrangement does not remove the principal’s authority to manage his own affairs; instead, the attorney-in-fact joins the principal in making these decisions by receiving legal authority to act in the principal’s place.

This is a popular option for elderly clients and others who would like assistance in managing their finances, but it also gives the principal confidence in knowing his affairs will be managed responsibly by a trusted person in the event of an emergency or a period of incompetence. The attorney-in-fact’s authority to manage the principal’s finances terminates if the principal passes away. At that point, the rules of intestacy or the terms of the principal’s will or trust will govern what happens to the remaining assets and property.

Power of Attorney for Health Care and Living Will

In New Hampshire, end-of-life decisions for health care and medical treatment are governed by two instruments that are combined into one form. The power of attorney for health care gives an agent the authority to make decisions about the medical treatment a principal will receive if he is not competent to make decisions on his own. These decisions may include the use or withdrawal of medical treatment, medication, and nutrition at the end of life. The principal may also establish his wishes for whether or not this agent has the authority to sign a do not resuscitate order on his behalf.

The second part of the form is the living will. The principal executes a living will to state whether life support should be administered when the principal is certified by medical professionals to be near death or in a permanently unconscious condition. The living will, which was amended by the Legislature effective as of January 1, 2015, also gives the principal the option of directing that nutrition and hydration should be continued even if all other forms of life support have been discontinued.

These instruments are simple and affordable to execute, and they are also invaluable components of any estate plan. To learn more about these options, or to discuss how your existing estate plan might be enriched by creating advance directives, please contact any of the estate planning attorneys at Cleveland, Waters and Bass.

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