Everyone should provide his or her loved one with a durable power of attorney, a health care directive and a HIPAA power . . . just in case.
Preparing a will involves an evaluation of your financial situation, a determination of your assets, your personal desires and how you wish to dispose of your property. But a will takes effect only after your death.
In addition to a will, you also should have three other documents in case you become incapable of attending to your affairs during your lifetime: (1) a durable power of attorney, (2) an appointment of a health care agent often accompanied by an advanced health care directive (commonly referred to as a health care proxy), and (3) a HIPAA power.
Power of Attorney
A power of attorney designates another person (referred to as the “attorney-in-fact”) to act on your behalf as to a wide range of financial matters, such as banking, investments, buying and selling assets, and gift making. The powers can be limited, but they more commonly are broadly described. The attorney-in-fact should be a trusted loved one or professional advisor.
The most common type of power of attorney is a “durable power of attorney,” which permits the attorney-in-fact to act for you even if you become incapacitated or incompetent.
A second form of power of attorney is a “springing power of attorney,” which becomes effective only when a specific event occurs, such as your incapacity or incompetence. A springing power is less common because it involves proving your incapacity or incompetence.
Several states, including New York, have adopted a standard statutory power of attorney form. This enables an attorney-in-fact to act promptly, if necessary.
Some financial institutions prefer to use their own power of attorney form, so you should ask for one to sign along with the statutory power of attorney form.
Appointment of a Health Care Agent/Health Care Directive
You should appoint a health care agent to make health care decisions when you are unable to do so for yourself. Many states have adopted laws authorizing such documents. In New York, this is called a "Health Care Proxy," authorizing a designee to make health care decisions on your behalf, including the decision whether to withhold life sustaining measures.
That appointment should be accompanied by a Health Care Directive that expresses your wishes as to the use of extraordinary life sustaining means (such as artificial hydration and feeding, mechanical respiration and cardiac resuscitation) if you are unable to make those decisions. This provides guidance to your health care agent and to medical professionals who may be reluctant to take steps in the absence of such guidance.
The Health Insurance Portability and Accountability Act (“HIPAA”) protects the privacy of medical records and other health related information. Only individuals authorized by you have the right to discuss your medical condition with a health care provider, gain access to medical records, or communicate with a health care provider or insurance company as to billing or health care coverage.
The statute can be a problem if you are physically or mentally unable to discuss your medical situation or treatment with a health care provider, or to grant authority to another to participate in such discussions or to deal with insurance coverage or reimbursements.
Since many health care providers refuse to allow a person acting under a power of attorney to access this information, it is prudent to execute a separate HIPAA authorization form.
You should prepare and periodically review these documents to insure that they reflect the current tax laws and your current finances, medical situation, and family relationships.
This ON MY MIND™ Blog post © 2014 by Cowan, Liebowitz & Latman, P.C., New York, NY.
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