Incapacity Planning: Power of Attorney & Directives

Estate planning gets discussed as preparation for dying. The documents you're far more likely to need are the ones covering the period where you're still alive and can't make decisions — and those are the ones people skip.

Last verified 2026-07-21

Two documents, two domains, no overlap

A durable financial power of attorney lets someone you name manage money on your behalf — paying the mortgage, filing a tax return, selling investments to cover care. 'Durable' is the load-bearing word: it means the authority survives your incapacity, which is precisely when you need it. A non-durable POA ends the moment you become incapable, which is exactly backwards.

A healthcare proxy names someone to make medical decisions: consenting to surgery, choosing a facility, deciding about life support. A living will sits alongside it and records your own preferences in advance, so your proxy is carrying out your instructions rather than guessing.

Neither agent can act in the other's domain. Name only a healthcare proxy and nobody can pay your bills; name only a financial POA and nobody can consent to your treatment. The gap isn't obvious until someone hits it.

What happens if you have neither

Without these documents, your family cannot simply step in. Banks will not let a spouse move money in your sole name, and hospitals may decline to discuss your condition with people who have no legal standing.

The remedy is a court petition for guardianship or conservatorship. It costs money, takes time you don't have, becomes a public record, and the court — not you — decides who is appointed. It may not be the person you would have chosen, and once appointed, the guardian often has to report to the court on an ongoing basis.

The comparison is stark, which is why this is the highest-value paperwork in estate planning: the documents that prevent all of that are short, cheap, and can be signed in an afternoon.