Michelle Singletary, the popular finance columnist for the Washington Post, recently highlighted the need for medical directives and powers of attorney, based on a situation in her own family. Her mother was critically injured in a house fire, and family members are working to care for her, despite the absence of those essential documents. The very candid articleappeals to her readers to get their affairs in order now.
The absolute minimum estate planning documents that everyone over the age of 18 needs to have in place are a durable power of attorneyand an advance medical directive.
The power of attorney names an agent who is authorized to conduct financial affairs on behalf of the principal. Virginia has a statutory power of attorney form that provides the agent with named, broad powers. As an alternative, the power of attorney can be customized to include, and exclude, specific powers, such as the ability to make real estate transactions or trade options. If no one is authorized to conduct one’s financial affairs, it may be necessary to go to court to establish a guardianship, an expensive and ultimately humiliating process.
An advance medical directive specifies the medical treatment that can and cannot be administered if the principal is unable to communicate and control his own healthcare. It also names the agent who is authorized to deal with healthcare providers and make decisions on behalf of the principal. If there is no medical directive, healthcare providers are obliged to provide aggressive and heroic measures to keep someone alive, even if there is no quality of life, no chance of recovery, and no desire to be maintained by artificial means.
The other basic healthcare document is a HIPAA privacy authorization, naming those who are permitted access to medical records and healthcare providers. This is particularly useful in dealing with health insurance companies.