The AARP says that 20% of adults over 50 have no retirement savings, and 61% are worried they won’t have enough. With such financial insecurity, these older adults may not be well-equipped to handle medical emergencies that may pop up along the way.
One thing you can do to alleviate this stress is to save up as early as possible. But another way is to outline your wishes for future medical decisions.
The terms for advance care planning can be confusing though, so we’re here to help. In this article, we’ll discuss healthcare proxy vs power of attorney so you know what terms to use as an Indianapolis senior.
What’s a Healthcare Proxy?
A healthcare proxy is also known as a medical power of attorney. It’s a legal document that allows you to designate someone to make medical decisions on your behalf if you’re incapacitated. This person is called a healthcare agent, and they can make choices in line with your wishes in regards to treatments, surgeries, end-of-life care, and organ donation.
The key feature of a healthcare proxy is that it only applies to healthcare decisions; it doesn’t apply to financial or legal matters. Also, it only becomes active if you can’t make decisions on your own, such as if you’ve:
- Fallen ill
- Develop dementia
- Are unconscious
In Indiana, your healthcare proxy must be signed and notarized for it to be valid.
What’s a Power of Attorney?
A power of attorney (POA) is a broader legal document that also has an agent. It authorizes them to act on your behalf as well, but in various capacities.
There are different kinds of powers of attorney (one of which we’ve discussed already), and it’d be challenging to cover them all here. However, we’ll go over the ones most relevant for seniors.
Durable Power of Attorney
A durable power of attorney (DPOA) is similar to a healthcare proxy in that they can also make medical decisions for you if you’re mentally incapacitated. However, they’re also in charge of your financial, legal, and property matters.
For example, they can pay your bills and handle investments, as well as file your taxes and apply for government benefits.
Limited Power of Attorney
A limited POA is also known as a special POA. As the name suggests, the agent only has authority for specific tasks or a set period of time. This means that it doesn’t cover all financial or legal matters; only those listed in the document are relevant.
A limited POA can allow someone to handle a real estate transaction for you while you’re out of town. Or it can give them authority for a specific banking or business transaction. Should you need a family member to sign documents on your behalf while you’re unavailable, a limited POA can authorize this too.
This document expires once the task is completed or you’ve reached the expiration date listed in it.
Springing Power of Attorney
A springing POA only takes effect when a specific event occurs. Typically, this is if you’re incapacitated, so an agent can’t act on your behalf unless a doctor states that you’re no longer mentally capable.
This type of POA prevents your agent from having power while you’re still mentally sound, meaning that it doesn’t take effect immediately upon signing. Only after a doctor certifies that you’re incapacitated can your agent handle financial and legal matters for you.
Healthcare Proxy vs Power of Attorney: The Key Differences
These two things may seem very similar in terms of medical decision-making, so let’s go over their key differences.
A healthcare proxy’s sole purpose is to manage healthcare decisions. However, a POA is broader, as it handles financial, legal, and property matters.
In addition, a healthcare proxy only applies if you’re incapacitated. With a POA, this may be true too, or it may be immediate, depending on the type you’ve chosen.
As far as decision-making powers go, a healthcare proxy applies to healthcare choices, treatments, and end-of-life care. A POA is more on the non-medical side of things, such as paying bills, managing assets, and signing contracts.
Both of these senior legal documents require signing and notarizing. However, POAs have additional legal requirements for financial matters.
Why Indianapolis Seniors Need Both
At this point, you may be having trouble deciding between these two documents. However, it’s actually in your best interest to have both! This ensures that all aspects of your well-being are covered in case of incapacity, including estate planning for aging.
If you don’t have either, the following may happen:
- Doctors may be unable to follow your desired medical preferences
- Loved ones may face delays or legal barriers in future healthcare choices or financial decisions
- Courts may appoint a guardian or conservator, which can be time-consuming and costly
How to Set Up a Healthcare Proxy and POA in Indianapolis
The first step is to determine who you can trust. Choosing a reliable person who understands your wishes and will act in your best interest can make a huge difference.
Then, you should consult an attorney. It’s true that you can find forms online, but Indiana law has specific requirements, and an estate planning attorney can help alleviate stress and give you direction.
Whichever route you go, ensure all legal documents are properly filled out, signed, and notarized. Lastly, distribute copies to your doctor, hospital, attorney, and trusted family members.
Be Prepared for the Future
Now you know the difference between healthcare proxy vs power of attorney. The next step is to take action, especially if you’re still in relatively good health.
You shouldn’t wait until an emergency to set up a healthcare proxy and power of attorney. By putting things in motion now, you’ll have peace of mind while protecting your rights. Plus, you’ll help your loved ones navigate important decisions on your behalf.
If you aren’t sure where to start, then consulting an elder law attorney can be beneficial. They’ll help tailor these documents to your specific needs.
Contact us today if you want to find out more about assisted living in Indianapolis. Rittenhouse Village at Northside is a SafelyYou Premier partner.
