Health planning and alternate decisionmakers

Health planning and alternate decisionmakers

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Q: I’m a single woman in my 60s. If I was injured and unable to make decisions for myself, how can I make sure my wishes regarding my care and finances are carried out? A: This is such an important question to ask, especially for LGBT individuals and couples. Without advanced planning, you may have little or no control over who is making important decisions on your behalf. Here’s what you need to know to be protected.

Estate planning is mostly about putting mechanisms in place to ensure your assets are distributed according to your wishes once you are gone. Yet there is another aspect to the process that centers on appointing others to manage your affairs during your lifetime.

What would happen if you became incapacitated and couldn’t handle your financial affairs? Who would act on your behalf to pay bills, watch over investments and deal with the paperwork that accompanies collecting insurance and other benefits? Or, who would make arrangements for your medical care and see that your wishes for were carried out? Without advance planning, a court would make these critical — and highly personal — decisions for you.

Fortunately, you can work with an attorney to make arrangements that allow your affairs to be managed by people you choose.

The role of alternate decisionmakers

Before you talk to a lawyer about naming alternate decisionmakers, you can save time by understanding the types of issues such individuals may be charged with addressing.

For financial affairs, a power of attorney

A power of attorney is a legal document that gives another person authority to act on your behalf with regard to legal, business or financial affairs. A big advantage of a power of attorney is that it can help prevent your loved ones from having to go to court to request guardianship over your financial affairs if you become incapacitated. This arrangement can also give the person you designate the ability to pay your debts, manage investment transactions and even make charitable gifts that could help reduce your estate taxes. The power-of-attorney agreement ends at your death unless you also name this person as the executor of your estate.

It is important to update a power of attorney at least every five years — otherwise, some financial institutions may not accept the document as valid. And some financial institutions may not accept the document regardless of the date, so it is best to check with each institution you deal with regarding their policy. (In these cases, you may need to draw up more binding agreements via your financial advisor.)

For medical concerns, health-care directives

The two most common forms of health-care directives are a living will and a health-care proxy. A living will is a document presented to an attending physician that explains the care you wish to receive (or avoid) in the event you are incapacitated by a terminal illness or serious accident. For instance, it can express your wishes for controlling pain, receiving nutrition or making life-support decisions.

Alternatively, a health-care proxy allows you to designate someone — a proxy — to make medical decisions for you. Keep in mind that in some states you may be able to combine a health-care proxy and a living will into a single document. Hospitals and nursing homes are required to ask about the existence of any such documents when you are admitted. In most states, a health-care proxy does not take effect until you can no longer make medical decisions for yourself; until then, only you can legally consent to any treatment. In addition, you can always change or cancel the document as long as you are mentally alert. If you decide to make changes to any of these documents, be sure to do so in writing.

A comprehensive health-care advance directive combines both a health-care proxy and living will into one document. Organizations such as AARP, American Bar Association and the American Medical Association have joined forces to create a simple yet comprehensive form.

It is important to note that while health-care directives are not financial documents, it is quite possible that during a visit with an attorney to discuss financial and estate-planning affairs, such documents may be packaged with other estate-planning items.

Planning creates peace of mind

Informing loved ones and doctors about the types of alternate decisionmakers you would choose in a wide variety of situations can bring peace of mind to those most concerned with your well being. Though you cannot anticipate an unexpected health crisis, you can plan ahead to ensure that you and your finances are cared for in a manner that coincides with your intentions, even if you cannot make decisions for yourself.

For more on whether a power of attorney and/or health-care directives are appropriate in your situation — and your state’s relevant laws — consult your attorney or financial advisor.

Jeremy Gussick is a financial advisor with LPL Financial, the nation’s leading independent broker-dealer,* and specializes in the financial planning needs of the LGBT community. He is active with several LGBT organizations in the Philadelphia region, including the Delaware Valley Legacy Fund, the Greater Philadelphia Professional Network and the Independence Business Alliance. OutMoney appears monthly. If you have a question for Jeremy, contact him at This email address is being protected from spambots. You need JavaScript enabled to view it..

This article was prepared with the assistance of Standard & Poor’s Financial Communications and is not intended to provide specific investment advice or recommendations for any individual. Consult your financial advisor or Jeremy Gussick if you have questions. LPL Financial, Member FINRA/SIPC. *Based on total revenues, as reported in Financial Planning Magazine, June 1996-2010.


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