DURABLE POWERS OF ATTORNEY AND HEALTH CARE PROXIES
Many people think of estate planning as involving only documents like Wills and Trusts, in other words, documents that control the distribution of assets once a person has passed away. In fact, some of the most important estate planning documents are those that speak to events that occur while one is alive. All estate plans should include documents that set forth instructions concerning your health care and financial decisions if you are alive but unable to act on your own behalf. The most important documents in this category are the durable power of attorney and the health care proxy. A living will and a HIPAA privacy directive should also be considered and in our opinion, included in every estate plan. These four documents answer two very important questions:
1. WHO WILL HANDLE MY FINANCES?
Durable Power of Attorney-In this author’s opinion, one of the most important estate planning documents is also one of the least expensive. A durable power of attorney (DPOA) allows the “agent” (also known as the “Attorney-In-Fact”) to stand in the shoes of the person granting the durable power of attorney (also known as the “Principal) with respect to the power holder’s finances. The durable power of attorney is effective upon signing, and “endures” or survives the later incapacity of the principal. This is the “durable” component.
Because the DPOA is such a powerful document, it is especially important to have a DPOA that is properly drafted. Certain events, such as mortgaging or events specific to real estate, gifting for either estate tax or Medicaid planning, and bankruptcy authority, need to be specified in your DPOA, so that your intent is clear from the face of the document and the document is not challenged by third parties who will be reviewing them.
The DPOA is especially important because if you do not have a power of attorney, and you become incapacitated, two of your relatives or certain other people may need to file a formal court guardianship. The guardianship process quickly becomes expensive and the appointment and any subsequent action taken on behalf of the incompetent involves a substantial amount of oversight by the Probate & Family Courts.
2. WHO WILL HANDLE DECISIONS CONCERNING MY HEALTH?
Health Care Proxy-This document determines who will make medical decisions on your behalf and communicate them to the appropriate physician or health professional. The Health Care Proxy generally lists the name, address and telephone number of the proxy on its face. It is recommended that only one person act as your health care proxy, as a) a quick answer may be required; b) locating more than one person may be impractical in a time critical situation and; c) if more than one person is named, parties may disagree on the decision to be made. The statute concerning health care proxies is set forth at Mass. Gen. Laws ch. 201D.
Living Wills-This document sets forth what decisions should be made by the health care proxy concerning your medical care if you are unable to communicate them. The Living Will is often completed in the person’s own handwriting and sets forth that person’s preference for care and extenuating treatment measures. Most people will recognize the “Living Will” as the document discussed at length in the “Terri Schiavo” case in Florida. Terri Schiavo, on life support for many years, had not herself put in writing whether or not she would like to survive under those circumstances. The Terri Shiavo case became important because Mrs. Schiavo’s husband disagreed with her parents as to whether or not Terri would have chosen to end the life support.
Unlike Florida, in Massachusetts the Living Will is not binding on the Health Care Proxy. In other words, your Health Care Proxy is not required to follow your Living Will. However, the Living Will can be used as evidence of your wishes and most Health Care Proxies do want to follow them. Living Wills take many different forms, and are also called Health Care Directives.
HIPAA- This document determines who will have access to your medical records. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) restricted access to patient records and requires certain documentation to allow others access to these records. A HIPAA authorization is necessary to allow all concerned parties access to records and to prevent unauthorized parties from participating in medical decisions. The HIPAA authorization ideally allows the appropriate people, by sharing the information, to assist the Health Care Proxy in making an informed decision that is best for the patient.
In summary, the Durable Power of Attorney, the Health Care Proxy, the Living Will and the HIPAA directive should be part of any adult’s estate plan. They are relatively inexpensive documents that can provide enormous peace of mind.
This article is for informational purposes only and does not constitute legal advice. An attorney client privilege can only be established upon meeting personally. After a discussion of the specific facts during the meeting and the payment and acceptance of a retainer, the attorney client privilege begins.
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