Power of attorney: This document gives a person (known as the principal) an opportunity to authorize an agent (usually a trusted family member or friend) to make legal decisions when he or she is no longer competent. There is no standard power of attorney; thus, each one must be geared toward an individual's situation. It is important for the caregiver to be very familiar with the terms of power of attorney because it spells out what authority the caregiver does and does not have. The agent should make multiple copies of the document and give one to each organization or company with which the principal does business.
Durable power of attorney for healthcare: This document appoints an agent to make all decisions regarding healthcare. These decisions include those regarding healthcare providers, medical treatment, and--in the later stages of the disease--end-of-life care. A durable power of attorney for healthcare allows the agent to authorize or refuse any medical treatment for the principal. This power goes into effect only once the principal is unable to make decisions for himself and is activated by the principal's attending physician.
Living will: A living will allows a person to state, in advance, what kind of medical care he or she desires to receive and what life-support procedures he or she would like to withhold. This document is used if a person becomes terminally ill and unable to make his or her wishes known. A terminal illness is defined as one from which a person's doctor believes there is no chance of recovery. A living will also can be used if a person becomes permanently unconscious. To be considered permanently unconscious, a patient must be viewed as having no reasonable possibility of regaining consciousness or decision-making ability. Two physicians must make this determination. Laws on living wills vary from state to state.
Living trust: This document enables a person (called a grantor or trustor) to create a trust and appoint a trustee to carefully invest and manage trust assets once the grantor is no longer able to manage finances. A person can appoint another individual or a financial institution to be the trustee.
Will: A will is a document created by an individual that names an executor (the person who will manage the estate) and beneficiaries (those who will receive the estate at the time of the person's death).
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