Financial Power of Attorney and Health Care Directive: Two Different Jobs

Estate planning includes decisions that may need to be made while you are living. Financial affairs and medical choices involve different responsibilities. A discussion about who should act in each role can help you prepare documents that fit your circumstances.

Financial authority concerns property and practical affairs

A financial power of attorney can authorize a chosen person to handle specified financial, real-estate, tax or other matters. The scope and when the authority begins depend on the document. Do not assume a person can handle every transaction simply because they are a relative or because a general form has been signed.

Health care planning concerns medical decisions and wishes

An advance health care directive can record health care wishes and designate an agent for medical decisions. Consider whether the person is available, understands your preferences and can communicate with providers. Naming a financial agent and naming a health care agent are separate choices; they may be the same person, but they do not have to be.

Discuss the practical questions before choosing

Think about distance, availability and whether the person is comfortable with the responsibility. Identify an alternate if the first person cannot act. Tell the chosen person how to locate the current document. For health care planning, discuss important wishes directly rather than relying only on someone’s ability to interpret a form during a stressful situation.

Coordinate the documents you already have

Bring existing powers of attorney, health care directives and trust papers to the meeting. Point out any different names, dates or alternates. Ask when each document operates and whether a later document replaces an earlier one. A trust’s successor-trustee provisions should also be reviewed, because managing trust assets is a separate role from handling every other financial matter.

Questions for your appointment

• What authority is granted, and when does it begin?
• Who acts if the first agent is unavailable?
• Which institutions or providers need a current copy?
• Are the documents consistent with the rest of the estate plan?

See the California Courts’ explanation of planning options and DHCS advance-care-planning resources for the distinct purposes of these tools. Choosing and preparing the right documents requires attention to the individual situation.