Proxies, wills and care: How to ensure you retain lifelong autonomy
Financial precautions like pension savings, health insurance and accident insurance are steps that most people take, but not all of us are so conscientious about legal precautions. However, as financial coach Kerstin Brunner explains, legal precautions are important for ensuring that we retain autonomy throughout our lifetimes.
When it comes to preparing for the future, financial precautions are only half of the picture. In fact, they only really work well when they come hand in hand with legal precautions. The problem is, most people don’t know much about the topic of legal precautions, and lots of myths and misconceptions circulate.
People generally feel well-protected with the financial precautions they have in place. If you have an accident, are in need of care, or lose your life, you can be reasonably sure that the insurance company will pay out, if the right conditions are fulfilled. But what about in other situations, when the possibilities aren’t so clearly planned out? What if for some reason you aren’t able to express your wishes? If there is no legal precaution concept implemented, you and your family members are no longer in the driver’s seat.
In this article, you will get a better understanding of why financial and legal precautions are two important sides of the same coin, and the main points you need to be aware of when setting legal precautions in place. After all, we are talking about your lifelong power to self-determination, so care needs to be taken!
It’s not a situation anyone wishes to be in, but there are circumstances in which someone is no longer able to express what they want or need. Life gets turned upside down, not only for the person in question but also for their family members, colleagues and friends. Such a situation is very emotional and involves not only time but money for those involved.
The stress of such a situation can be greatly reduced by the appointment of a healthcare proxy. A healthcare proxy (or durable power of attorney for healthcare, or Vorsorgevollmacht in German) is a document that names someone you trust (like a friend or family member) as a proxy to make decisions about your healthcare, should you be unable to do so. The document can also contain your wishes on other things like treatments.
It can also give your proxy the power to communicate on your behalf with banks, official authorities, insurance companies, postal services, and more.
If no such document exists, then the state will step in and assign a caretaker. This person is not necessarily a family member. It could be a stranger. This means that every payment needs to be discussed with this caretaker, as family members would no longer be allowed to withdraw money from the affected person’s bank account.
To cut a long story short: no one is in charge in this situation apart from the state. This situation would be unacceptable to most people and cannot be described as self-determination. To maintain autonomy over your own affairs in a situation like this, you would need to have a healthcare proxy in place.
Living will (advance decision)
Many people feel anxious or uncomfortable ahead of a hospital visit, worrying about possible outcomes. But what if you get admitted to hospital because of an accident or emergency? It’s impossible to plan ahead for some situations, but what you can do to prepare for possible medical emergencies is draw up a living will (also known as an advance decision or Patientenverfügung in German)
A written living will is a precautionary measure in which patients stipulate that certain medical measures are either carried out or not carried out in certain situations where they are unable to consent to medical matters. This ensures that the patient's wishes are implemented.
If an advance decision exists, doctors and nurses are bound by the patient’s decisions. If there is no advance decision, healthcare professionals are guided by the Hippocratic oath, which states that they are obliged to do all they can to keep a person alive. In some circumstances this approach might go against the affected person’s wishes. This is why an advance decision supports your power to self-determinate your life, especially in difficult emotional situations.
Have you ever thought about how you would like to be treated should you become in need of care? If not, you won’t have a clear picture about where your care should take place and how much time, effort and money it should involve. Care isn’t just an issue for old age - you could find yourself in need of care at any age - but nonetheless we are all getting older, and the older we get, the higher the possibility of us needing care support becomes. And how a person wishes to be cared for is a very personal question.
In most cases, payments from the state don’t cover 100 percent of the costs of care. In July 2023, the average copayment (covered by the person in need of care themself) for a care home in Baden-Württemberg was 2.600 euros per month. And so the question comes: where does the rest of the money come from? The answer is either savings, regular income, or insurance.
In order to prepare yourself for this eventuality, you need to consider two big questions: First, what kind of care you want, and second, how much it will cost to get you this kind of care. Speaking with an expert can help you find a solution that suits you and your family members, and to put the correct type of insurance or savings in place.
Last will and testament
Most people know that they should write a will to express their wishes as to what should happen to their money, property and possessions after their death, but not everyone knows why it is so important.
As the topics above have shown, there are two ways to act: you can prepare for your death, or not. If no will exists upon your death, intestacy rules will be executed. Depending on the family situation, people will usually build a community of heirs. In Germany we call it an “argument community”, because in many cases these people don’t have the same opinion on anything. But the only way for them to act is to reach an agreement and express one voice on the matter. This is often a lengthy process.
To prevent this from happening, you need to have a last will and testament that expresses your wishes exactly, and appoints a person to execute those wishes. It is highly recommended that you work with a lawyer to find the best solution for your will.
There are many things you can do to ensure you retain lifelong self-determination. If you want to chat through your options, Kerstin Brunner is a fully-licensed financial expert who specialises in financial education for internationals in Germany. Get in touch with her for a consultation.