Which estate planning tool includes provisions for both health care and financial decisions?

The durable power of attorney is designed to provide comprehensive authority for a designated individual to make both health care and financial decisions on behalf of someone else. This tool remains effective even if the person who created it becomes incapacitated, ensuring that critical decisions can be made in accordance with the individual's wishes.

Specifically, the durable power of attorney encompasses both medical directives, where agents can make health care decisions such as treatment options and end-of-life care, and financial powers, allowing agents to manage financial matters, including paying bills, managing investments, and dealing with other financial obligations. The ability to cover both areas is what distinguishes it as an effective estate planning tool for ensuring that an individual's preferences are honored in both health and financial contexts.

Other choices, such as a will, primarily determine the distribution of a person’s assets upon death and do not encompass health care decisions while the person is alive. A living trust focuses on managing assets during life and can provide for asset distribution after death but does not automatically include medical decision-making authority. Similarly, a power of attorney for property only is limited to addressing financial matters and does not pertain to health care decisions.