Power of Attorney
Estate planningGlossary term
Definition
A legal document that grants another person, called an agent or attorney-in-fact, the authority to make decisions and act on your behalf in financial, legal, or healthcare matters. A power of attorney can be limited to specific transactions or broadly cover all financial affairs, and it can take effect immediately or only upon your incapacitation. Having a power of attorney in place ensures that someone you trust can manage your affairs if you become unable to do so yourself.
Related terms
- Healthcare ProxyA legal document that designates a trusted person to make medical decisions on your behalf if you become unable to make or communicate those decisions yourself. The person you choose, sometimes called a healthcare agent, should understand your values and wishes regarding medical treatment. A healthcare proxy works in conjunction with a living will to ensure your healthcare preferences are honored.
- Advance DirectiveA broad term for legal documents that allow you to express your healthcare preferences and appoint someone to make medical decisions on your behalf in case you become unable to do so. Advance directives typically include a living will and a healthcare proxy, though specific requirements and terminology vary by state. Having advance directives in place ensures that your medical care aligns with your values and reduces the burden on family members during difficult times.
- Living WillA legal document that specifies your wishes regarding medical treatment and life-sustaining measures if you become terminally ill or permanently incapacitated and cannot communicate your decisions. Unlike a last will and testament, a living will takes effect while you are still alive and addresses healthcare decisions rather than asset distribution. It typically covers preferences about resuscitation, ventilators, feeding tubes, and pain management.
- ConservatorshipA court-ordered arrangement in which a judge appoints a person or organization, called a conservator, to manage the financial and personal affairs of an adult who is deemed unable to care for themselves. Conservatorships are typically established for individuals with severe cognitive impairments, mental health conditions, or physical disabilities. They involve significant court oversight and can be difficult to reverse, making them a measure of last resort when less restrictive options like power of attorney are not in place.
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