When it comes to estate planning, many people wonder which documents hold the most importance. Among the essential documents commonly discussed are the healthcare directive and the power of attorney. Both are vital, and as Jason Marx, a partner in Mandelbaum Barrett PC’s Tax, Trusts and Estates Practice Group, explains, these two documents serve as the foundation for surrogate decision-making and should be part of every comprehensive estate plan.
Understanding how healthcare directives and powers of attorney work together helps individuals and families make informed decisions about their planning. The question is rarely which document matters more; the answer is almost always that both are necessary and that neither can fully substitute for the other.
Surrogate Decision-Making Documents
Healthcare directives and powers of attorney are what estate planning attorneys call surrogate decision-making documents. These instruments come into effect while you are still alive, empowering someone you trust to act on your behalf if you become unable to make decisions for yourself due to illness, injury, or incapacity.
A durable power of attorney designates an agent to handle your financial affairs: signing tax returns, managing bank accounts, dealing with real property, and carrying out other financial responsibilities on your behalf. The “durable” designation means the power survives your incapacity, allowing your agent to continue acting without interruption. Without a durable power of attorney in place, a family member seeking to manage your financial affairs during a period of incapacity may need to pursue a court-supervised guardianship proceeding, which is both expensive and time-consuming.
The Healthcare Directive
A healthcare directive serves a parallel but distinct function. It designates a healthcare agent, sometimes called a healthcare proxy, who has the authority to make medical decisions on your behalf if you are unable to communicate your wishes. The healthcare agent may also have the authority to access your protected health information under applicable privacy laws, allowing them to make fully informed decisions about your care in consultation with medical providers.
Without a healthcare directive, even your closest family members may lack the legal authority to make medical decisions on your behalf. In those situations, the path to obtaining that authority runs through the courts, adding legal proceedings at exactly the moment when a family’s focus should be on the person who needs care. Having the document in place in advance eliminates that obstacle entirely.
Why Both Documents Are Necessary
The healthcare directive and the power of attorney address different domains of decision-making, and no single document covers both. A power of attorney does not authorize your agent to make healthcare decisions, and a healthcare directive does not give your agent authority over your financial affairs. A well-structured estate plan includes both documents, along with the other instruments that reflect your wishes for your assets and your care.
In estate planning, the goal is not to rank documents by importance but to ensure that a complete plan is in place. When both documents are properly drafted and executed, you have designated trusted individuals to handle both your financial affairs and your healthcare needs, covering the decisions most likely to arise during any period of incapacity.
Estate Planning at Mandelbaum Barrett PC
Jason Marx and the attorneys in Mandelbaum Barrett PC’s Tax, Trusts and Estates Practice Group work with individuals and families throughout New Jersey and beyond to create comprehensive estate plans that address their full range of needs, including healthcare directives, powers of attorney, wills, trusts, and related planning documents.
To speak with a member of the Tax, Trusts and Estates Practice Group about healthcare directives, powers of attorney, or any other estate planning matter, contact Mandelbaum Barrett PC through the contact page. Our attorneys are prepared to help you build a plan that reflects your wishes and protects those you care about.