What are power of attorney and the health care directive?

Power of attorney and the health care directive are two aspects of your will and estate plan that dictate who will make financial decisions on your behalf, and how you should be medically treated in case you are incapacitated (respectively). As you can tell, these are critical parts to you plan, so let's dive a little deeper into each of these things.

For power of attorney, you want to appoint someone who is trusted and responsible. Considering this person is going to be paying your bills, dealing with your mortgage, and making sure that your financial life is protected while you are incapacitated, you need to ensure that he or she is an organized and trustworthy individual.

With the health care directive, this one takes some serious consideration too. When you are drawing up this document, you have to consider myriad medical possibilities and make potentially life-changing decisions for all of them -- even though they aren't happening to you at the time you are creating the directive. That can be a difficult task, so it helps to have some legal consultants with you when creating this directive.

For example, how would you want to be treated while in a coma? It may seem obvious at first, but the more you think about the situation -- and the fact that you aren't in that situation presently -- makes it much more difficult to realize how you want to compose your directive.

Source: NerdWallet, "2 Estate-Planning Documents Millennials Need," Rachel Podnos, March 3, 2016

Categories: Estate Planning