Healthcare Proxy vs. Power of Attorney: Critical Differences

Healthcare Proxy vs. Power of Attorney: Critical Differences

When planning for incapacity — whether from illness, injury, or aging — you need two separate categories of agents: one to handle your medical decisions and one to handle your financial and legal affairs. Many people assume a single document covers both, which leads to significant gaps in their planning.

The Core Distinction

Healthcare Proxy (Medical Power of Attorney): Authorizes a named person (your healthcare agent) to make medical and healthcare decisions on your behalf if you are unable to do so.

Durable Power of Attorney (Financial POA): Authorizes a named person (your attorney-in-fact or agent) to handle financial, legal, and business matters on your behalf.

These are separate documents covering completely separate domains. You typically need both.

Healthcare Proxy (Medical Power of Attorney)

What Your Healthcare Agent Can Do - Consent to or refuse medical procedures, tests, and treatments - Make end-of-life care decisions - Speak with doctors, nurses, and specialists - Access your medical records (HIPAA authorization) - Make decisions about placement in care facilities

What They CANNOT Do - Handle your bank accounts or financial matters - Make legal decisions (contracts, real estate, taxes)

When It Activates Most healthcare proxies activate only when your doctor certifies (in writing) that you lack the capacity to make your own healthcare decisions.

Choosing Your Healthcare Agent The best healthcare agent is someone who: - Knows your values and wishes deeply - Can be emotionally neutral in crisis situations - Will advocate for what YOU want, not what THEY would choose - Is geographically accessible in emergencies

Durable Power of Attorney (Financial)

What Your Financial Agent Can Do (depending on the scope you grant) - Manage and access bank accounts - Pay bills and taxes - Buy or sell real estate - Manage investments - File tax returns on your behalf - Run your business - Apply for government benefits

The "Durable" Feature A standard power of attorney becomes void if you become mentally incapacitated. A durable power of attorney specifically states that it remains in effect during incapacity — which is exactly when you need it most.

"Springing" vs. "Immediate" Powers - Immediate (general) POA: Takes effect immediately upon signing - Springing POA: "Springs" into effect only upon a triggering event (typically physician certification of incapacity)

Most financial planners recommend durable immediate POAs for ease of use when needed urgently.

What Happens Without These Documents

If you become incapacitated without a healthcare proxy and financial POA:

1. 1Medical decisions: Your doctors and family are left making decisions without clear legal authority. Family members may disagree. Courts may appoint a guardian or conservator — a slow, expensive, and public process.

1. 1Financial matters: No one has legal authority to access your accounts, pay your mortgage, or manage your investments — even a spouse may face obstacles without POA in certain financial institutions. Again, courts may step in.

Do You Need Both?

Yes, in virtually all cases. The healthcare proxy and financial POA work together as your complete incapacity plan:

• Healthcare proxy covers the doctor's office, hospital, and care facility
• Durable financial POA covers everything from your bank to your business

Both documents should also be reviewed after major life events: marriage, divorce, death of a named agent, or significant changes in your relationships.

Create both — the financial power of attorney and a healthcare proxy — with iRunDocs to ensure you have complete coverage for life's unexpected events.