What You Need to Know


If you are diagnosed with a terminal illness, it can feel as if you are losing control over everything. A sense of uncertainty may weigh heavily on your mind as you wrestle with questions about the path you are now on. As you and your loved ones begin to process the potential changes and timeline that may come along with your diagnosis it can be hard to think about anything else. Though it can be difficult, this is a time that you will want to make sure that you have established comprehensive estate planning documents and that they are up to date. Not only will these allow you to have peace of mind that your family will continue to be provided for, but they can also ensure that your financial and healthcare matters are conducted according to your wishes if you become incapable of making decisions for yourself. By including powers of attorney in your documents, you can be assured that trusted individuals you have appointed will have the ability to act and handle important tasks on your behalf if you become unable.

What is Power of Attorney (POA)?

A power of attorney is a legal document that gives one person the right to act on behalf of another person. If you are the person who wants to have someone make decisions and handle tasks on your behalf, you are known as the principal. The person who you grant authorization to is referred to as an agent or an attorney-in-fact. This person does not need to be a lawyer and power of attorney can be given to more than one individual. You can grant an agent broad or limited authority.

There are two main types of powers of attorney that should be considered in your end-of-life planning:

Medical Power of Attorney

This is also known as a health care proxy.  This legal document allows you to appoint someone you trust to make health care decisions for you if you lose the ability to make decisions yourself.  

Financial Power of Attorney

This document lets you designate someone to act on your behalf in financial matters. The agent that you give this authority to is obligated to carry out your wishes to the best of their ability as is specified in the agreement. They can handle a variety of financial tasks that may include filing tax returns, managing a bank account, signing checks, making withdrawals and deposits, and managing investment accounts if you become unable to understand or make decisions.

It is important to note that there are several types of financial POAs that have some key differences between them:

  • A general POA allows an agent to act on behalf of the principal in all matters as allowed by state law.
  • A durable POA has standing powers which are specified in the agreement.
  • A limited POA has powers which are limited to a specific situation or period of time as defined in the agreement.
  • A springing POA “springs into effect” based on circumstances that are outlined in the agreement. For instance, it may state that your primary doctor and an additional doctor must both state that you are unable to handle your finances before the powers of the agreement become active.

As you create or update your estate planning documents, it can be hard to consider a time when you may not be able to manage tasks you are accustomed to dealing with, especially as you may feel perfectly capable of making decisions and handling your finances in the present. It is difficult to give up control to someone else, even when you are confident they are committed to helping you. It can be helpful to remember that you have options. With multiple types of POAs, your financial advisor can help you evaluate all of your choices to determine which powers might be right for you and the most suitable documents for your personal circumstances.

Why it Matters for Those with a Terminal Illness

Any individual 18 or older should think about establishing estate planning documents which include medical and financial powers of attorney.  However, if you are diagnosed with a terminal illness, it is now more important than ever. As the progression of medical symptoms can be unpredictable, so may the timeline be. As illness or treatments continue, it may be a possibility that you will lose your decision-making capacity or the ability to communicate.  Without powers of attorney in place, others may be forced to make choices for you that may not align with what you want. You can prevent this by designating individuals you trust to act on your behalf. You can make your wishes known in advance and can clearly express your feelings about how you want your financial and health matters to be managed. This can benefit you and your loved ones in several ways:

  • Reduce family stress during critical moments. By giving your agent(s) clear instructions on how you want your affairs to be managed, if they must act on your behalf they can do so with confidence knowing that they are making decisions you would want.
  • Maintain financial continuity. Your financial power of attorney agent can pay bills, write checks, manage your accounts and other transactions which you authorize.
  • Ensure that your values and preferences are honored. You may have strong feelings about certain medical treatments or whether or not you would want medical personnel to perform heroic measures. You can discuss these with your medical power of attorney agent so that they understand exactly what you want and will have the authority to make decisions for you if you are unconscious or unable.

Choosing the Right Person as Your Agent

Selecting someone to serve as a power of attorney agent is a very important decision. You will be placing great trust in them to carry out the responsibilities of the agreement to their best abilities. Depending on the extent of the powers you grant, you are giving them considerable authority to make choices about your healthcare and/or finances. This is a task that goes beyond whether or not someone cares deeply about you. Not only do you need someone who is trustworthy, level-headed, and understands your wishes, they also need good communication and record-keeping skills. A spouse can be a good choice, but their own age or health concerns must be considered as well. It might be more beneficial to select a responsible relative or adult child who understands your family dynamics and is committed to helping you. If you have more than one adult child, you may even consider multiple powers of attorney that divide responsibilities.

Your agent does not need to be a family member. They can be a professional who is legally obligated to act in your best interests. Your financial advisor can help you review the unique dynamics of your family and finances as you select appropriate candidates. You will want to have alternates available if the first person you choose cannot serve. It is also vitally important that you have open, honest conversations with anyone you are considering to serve as your agent so that you both can be comfortable with the situation before appointing them.

How Your Financial Advisor Can Help You

If you do not already have a financial power of attorney and a medical power of attorney in your estate planning documents, or you have not recently updated them, now is the time to address this. There are different types of financial power of attorney documents which each have their own limitations, powers, and times that they are in effect. Your financial advisor can explain the benefits of each as they apply to your specific situation and help you to ensure that the documents in your estate plan are best suited to your needs. If you are living with a terminal illness, it is essential that you act with urgency. Power of attorney forms must be signed while the principal is still legally competent and waiting too long can lead to complications should you lose mental capacity.

If you are facing a serious diagnosis, one of the most helpful things you can do for yourself and your loved ones is to create powers of attorney. By putting these protections in place now it can make a world of difference tomorrow. If you would like to learn more about how your financial advisor can help you, please contact us.