The acronym HIPAA stands for the Health Insurance Portability and Accountability Act of 1996. In this post, we will explain why this piece of legislation is something to take into consideration when you are planning your estate.
Advance Directives for Health Care
Everyone is well aware of the fact that you have to facilitate postmortem asset transfers when you put your estate plan in place. A lot of people think this is the long and short of it, but a proper estate plan will also address eventualities that you may face toward the end of your life.
Nobody wants to think about this type of thing, but people usually do not pass away without experiencing a period of incapacity in one form or another. It can be cognitive or physical, and people that are on strong medication can become unable to communicate sound decisions.
To account for these possibilities, your estate plan should include documents called advanced directives for health care. One of them is a living will.
With this type of will, you state your wishes with regard to the use of feeding tubes, artificial hydration, resuscitation, and mechanical ventilation. You can address each of these different forms of life support individually, and you can add comfort care medication and organ and tissue donation choices.
The other advance directive that is necessary is a durable power of attorney for health care. This document is used to name someone to act on your behalf if you become unable to communicate your own decisions. These would be matters that are not covered in the living will.
Now that you understand the incapacity planning component, we can look at the Health Insurance Portability and Accountability Act. This measure prohibits medical professionals from sharing information with anyone other than the patient.
Obviously, your health care agent would not be able to do the job without access to this crucial information. Your incapacity plan should include a HIPAA release to give the doctors the ability to communicate freely with your agent and anyone else that you choose to add.
While we are on the subject, we should point out the fact that HIPAA protections extend to all adults, even people that just turned 18. As a result, if you have an 18-year-old child, doctors would not be able to discuss their medical condition with you.
For this reason, if you are a parent, you should explain the situation to your young adult child so they can sign one of these forms. They can also make you the agent under a durable power of attorney for health care.
Financial Decision Making
Your incapacity plan should also address the financial part of the equation. If you have a living trust, you would act as the trustee while you are alive and well. To account for possible incapacity, you can name a disability trustee when you establish the trust.
For property that is not held in the trust, you should execute a durable power of attorney for property. You can use the same person to act as the agent for both powers of attorney, but this is not a requirement.