Having these essential documents completed can help give you peace of mind knowing that your wishes about medical treatment and your financial affairs will be taken care of by someone you trust.
Estate planning includes more after-death distribution of assets through a will or a trust. It also takes into consideration the need to create a way for someone you trust to make health care and financial decisions on your behalf when sickness or infirmity makes it impossible for you to make them on your own. Three key documents everyone should have are durable powers of attorney, powers of attorney for health care and HIPAA authorization.
Each document gives you peace of mind knowing that someone can step into your shoes with the legal authority to make decisions when you cannot do so due to temporary or permanent disability. The HIPAA authorization is a frequently overlooked document that may avoid situations when a physician or other health care provider feels compelled by HIPAA privacy rules to refuse to share information with the person you have entrusted to manage your affairs.
Although the most common scenario for a health care power of attorney involves helping an elderly parent, there are numerous scenarios where this document is invaluable for people of all ages. A health care power of attorney is a proxy that allows a designated agent to make health care decisions when you cannot do so because of physical or mental incapacity.
Each state has its own laws governing the appointment of another person to make health care decisions on your behalf. Some states refer to the legal documents as health care powers of attorney while others call them health care proxies, advance medical directives or use other terms. The majority of states have rules to protect you by not allowing an agent using a health care power of attorney to override decisions you make if you are physically and mentally capable of making them.
Another critical component of a health care power of attorney is the ability of the agent to make decisions regarding treatment for mental health problems. This may avoid costly and time-consuming conservatorship and other court proceedings when mental health decisions must be made.
A durable power of attorney allows you to appoint someone you trust to handle financial and other non-medical decisions on your behalf. It offers tremendous flexibility and can be customized to your specific needs. For example, the wording of a financial POA can make it effective immediately or at some point in the future. It can also be customized to only become effective in the event you cannot make decisions because of physical or mental incapacity. The document can authorize your agent to act on your behalf in all financial matters, or it can be limited to specific matters that you specify within the document.
Unless limited by the language of the document itself, a financial power of attorney remains in effect unless you revoke or make changes to it. If you become incapacity due to a mental disease or disorder, language may be included in your power of attorney when it is prepared by your lawyer to make it a durable POA. Durable POAs survive and are not affected by the fact that you later become incompetent.
A HIPAA authorization allows medical professionals to discuss a person’s medical condition with whomever the person chooses. Without this authorization, medical privacy laws forbid the disclosure of confidential patient information with anyone other than the patient. Although an agent with a validly executed health care power of attorney should have access to your medical information, some physicians may still be reluctant to disclose details without a written and signed HIPAA authorization.
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