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I am having problems understanding what it means.

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AgingCare has a number of related articles, read through them all and you should have a better understanding.

www.agingcare.com/health-care-directives
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Your MD has the forms and can explain them and help you fill them out.
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Casper, generally the proxy makes decisions for the person who executed the document, under general and specific guidelines. E.g., if the person who executed it doesn't want life saving measures in specific or general situations, and is not in a position to express that verbally at the time, the proxy would advise the medical professional that life saving measures aren't desired.

These Living Wills a/k/a health care proxies can cover a wide range of situations. Some people may want extraordinary measures to be applied to try to save their lives, others may not.

The proxy has to follow the wishes expressed in the document.

It is a weighty responsibility, but necessary to know what someone who might be incapacitated would want done to try to save, prolong, or end that person's life. The avoidance of suffering in terminal situations can be a prime consideration.

If that doesn't help, post back and examples can be provided.
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