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Elderly patient in a hospital bedFailing health often robs people of their agency. Whether due to age or illness, many hospital patients can’t effectively communicate their own wishes. For legal matters, this is handled through matters such as medical power of attorney, trusts and estates. This can also apply when it comes to respecting the patient’s medical wishes. Several legal structures exist to deal with that as well, but the living will and healthcare proxy are two of the most common. Consider working with a financial advisor as you make arrangements for end-of-life care.

When it comes to planning for your health, estate and other related matters, there are few national laws; it is almost entirely a state-by-state issue. Make absolutely certain you understand the rules of their individual state before signing any documents. In many, if not most, cases, readers should consult an attorney before making any decisions. However, everyone needs a place to start. Here are the broad differences between a healthcare proxy and a living will.

What Is Incapacity?

Healthcare proxies and living wills both exist to solve the same problem: How can you ensure that doctors follow your medical wishes if you cannot effectively communicate or enforce those wishes yourself? This is a common problem among patients in severe distress, such as those who are unconscious, not lucid or on strong drugs. When physically, mentally or medically incapacitated, a patient can’t express their wishes to their doctor.

Incapacity can be a difficult subject. Legally it is defined as a situation in which the patient is physically or mentally incapable of making and expressing a decision about his or her healthcare.

In cases where the patient is physically unresponsive there is rarely debate. If someone is unconscious, say, or has been sedated for surgery, it isn’t possible for the patient to speak with their doctor. Someone must make their decisions for them.

Mental incapacity is more complicated. This is defined as a situation in which the patient is unable to understand the nature and quality of the decisions they are being asked to make. A patient who has experienced a severe break with reality will likely meet this standard, for example. The same may be true for someone who has been heavily medicated or who suffers from severe Alzheimer’s. In cases like these, the law considers a patient mentally incapable because they cannot understand the nature and quality of their actions.

This is not to be confused with patients who make a decision against the advice of their family or doctor.

Sometimes people try to challenge mental capacity by claiming that a decision of a patient, such as an elderly parent, demonstrates incapacity. Essentially they argue that no lucid person would make a given choice. This is most common when a patient refuses further treatment. It is rare, if ever, that the law recognizes these arguments. Incapacity must be shown due to some external factor.

A doctor will decide whether the patient lacks capacity to make his or her own medical decisions. In some extreme cases a family may attempt to intervene with this declaration by getting a court order. Indeed, this is an essential backstop against bad actors. Should a doctor decide that a coma patient has capacity, for example, the patient’s family would need some form of recourse.

However, these are edge cases. For all practical purposes, a patient’s doctor determines capacity.

Absent other arrangements, in case of incapacity a family member will typically assume the right to make medical decisions for the patient. If none are available a doctor will usually do so. To avoid that outcome, a patient can set up a chain of alternative authority. The most common forms of alternative authority are healthcare proxies and living wills.

What Is a Healthcare Proxy?

"PROXY" spelled out in blocksAlso referred to as medical power of attorney, a healthcare proxy is someone to whom a patient assigns their authority to make medical decisions. A decision made by an authorized healthcare proxy has the same force of law as if it were made by the patient themselves. As the alternative name suggests, a healthcare proxy is a power of attorney which applies specifically to medical circumstances. It lets this person make medical decisions on your behalf if you are physically, mentally or medically incapacitated. You must assign a healthcare proxy before any incapacity occurs. Someone who has been deemed incapable of making their own healthcare decisions cannot make any legally binding assignments, including choosing a healthcare proxy.

Typically you may assign a healthcare proxy any specific scope or instructions that you choose. For example, you can establish a healthcare proxy only over decisions about continuing care, or you may choose to explicitly not assign your healthcare proxy the right to decide to “pull the plug.” However, within the proxy’s scope their decisions are typically final. They have the same range of authority that you would in person.

For this reason it is extremely important to choose a healthcare proxy whose judgment you respect, and one who you trust to honor your wishes. For many patients this means simply choosing someone close who will see to their best interests. However, other patients may have specific medical requests. This is most common among patients with specific religious or end-of-life concerns. In those cases it is essential that you select someone who understands those requests and will honor them.

You may revoke someone’s power as your healthcare proxy. However, like assignment, this can only be done by someone who has not been deemed physically, mentally or medically incapable.

What Is a Living Will?

A living will is a document in which you clarify your medical wishes. It is a set of instructions for how you want to be treated in case you are incapacitated. Some of the most common instructions that you can include in a living will include: end of life and resuscitation matters; religious objections to specific treatment; choices regarding certain medications; informed consent and risk assessment; and organ donation.

In most states a living will only takes effect for life-or-death treatments. Your doctors will refer to your living will when it comes to treatments that could prolong or save your life, or withholding treatment that could result in your death. However, some states may apply living wills to any instructions if you are physically, mentally or medically incapacitated.

A living will is similar in form to a testamentary will. Where a testamentary will is a series of instructions on what you want done with your assets after death, a living will gives instructions on how you want to be treated in case you can’t make your own medical decisions.

Like a healthcare proxy, a living will must be created before you are declared medically incapacitated. It can also be revoked, but typically also only while you are physically, mentally and medically competent.

Compared to a healthcare proxy, a living will does not hand your authority over to a third party. This eliminates the risk of someone deciding that your judgment was wrong.

However, you must also be very careful that your instructions are clear and specific. With a living will there is no one except your doctor to resolve questions that the will doesn’t answer, or to deal with unknown and unanticipated circumstances. You may prohibit a drug that makes you nauseous, for example, not realizing all of the conditions that drug treats. Or you may ban life support devices, not realizing that clause could arguably cover pacemakers or assisted breathing machines.

In cases where a living will leaves ambiguity, your doctor or next of kin will typically make decisions for you. As a result a living will works best when you can cover unambiguous circumstances, such as religious objections to certain treatment. Medical decisions which require a judgment call, such as DNR clauses, are typically better left to a healthcare proxy.

The Bottom Line

"ARE YOU PREPARED?"

A healthcare proxy and a living will both have the same purpose: to see that your medical wishes are expressed and honored, even when you can’t do so yourself. You give a medical proxy the authority to make those decisions for you, while a living will sets those wishes out in writing. Each has its strengths and weaknesses, but both can be very important. Finally, you should make absolutely certain that you understand the rules of your individual state before signing any documents.

Tips on Healthcare Planning

  • Planning for your future is always a good idea, and it’s always wisest to do it with the help of a financial advisor. Finding one doesn’t have to be hard. With SmartAsset’s matching tool you can find a financial advisor near you in minutes and begin the process of planning for your financial future.  If you’re ready, get started now.
  • Here’s a useful guide to healthcare for retirees. Also, Medicare Part A coverage is government health insurance that covers hospital care for people age 65 and older. It doesn’t cover the cost of preventative care, medically necessary procedures or prescription drugs. In many cases, it’s free.

Photo credit: ©iStock.com/gorodenkoff, ©iStock.com/Devenorr, ©iStock.com/gustavofrazao

Eric Reed Eric Reed is a freelance journalist who specializes in economics, policy and global issues, with substantial coverage of finance and personal finance. He has contributed to outlets including The Street, CNBC, Glassdoor and Consumer Reports. Eric’s work focuses on the human impact of abstract issues, emphasizing analytical journalism that helps readers more fully understand their world and their money. He has reported from more than a dozen countries, with datelines that include Sao Paolo, Brazil; Phnom Penh, Cambodia; and Athens, Greece. A former attorney, before becoming a journalist Eric worked in securities litigation and white collar criminal defense with a pro bono specialty in human trafficking issues. He graduated from the University of Michigan Law School and can be found any given Saturday in the fall cheering on his Wolverines.
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