Estate planning focuses, necessarily, on how your assets should pass to your chosen beneficiaries at your death. However, proper estate planning should also address what can be done to help you out during your lifetime, in the event you are incapacitated. If you are unconscious or otherwise laid out and cannot make your own decisions, you need to be assured that the right people are making your decisions for you. You want to know that the people acting on your behalf are people who love you, have your best interests in mind, and share your personal philosophical beliefs regarding things like the appropriate ways to spend your money, and desirable and undesirable states of health. This planning is accomplished through the drafting of various documents which are ancillary to your will or trust (so, appropriately, they are often called “the ancillary documents”).
Durable Power of Attorney
This document is also known as the Financial Power of Attorney. Its purpose is to appoint the person to handle your finances or manage your assets when you are unable to do so yourself. The agent’s authority may be “springing,” meaning the agent may only work on your behalf when you are incapacitated. Or, the agent’s authority may be “durable,” meaning it is effective immediately and continues after you become incapacitated.
Medical Power of Attorney
As you can guess, the Medical Power of Attorney appoints an agent to make medical decisions for you. The authority of the agent under this document is only “springing.” So as long as you can participate in a decision with your doctor, your medical power of attorney agent has no ability to make or change any of your decisions.
“HIPAA” stands for the Health Insurance Portability and Accountability Act. This federal law created the national standards for protection of patent health information from being disclosed without a patient’s consent. The HIPAA Consent, or HIPAA Release, is the document in which you may indicate to whom doctors or hospitals may disclose your health information. It is obviously important for your Medical Power of Attorney agent to be able to speak openly with your healthcare providers. And the agent under your Durable Power of Attorney should also be able to speak with healthcare providers to be able to effectively verify what services were provided, that billing was correct, that there are no charges that need to be contested.
Designation of Guardian
This is not a document appointing a guardian for your minor child… it is for yourself. If your incapacity declines to the point where (1) you need protection from your own bad decisions (probably financial decisions); or (2) you are conscious but cannot meaningfully participate in life decisions regarding your healthcare, your residence, or your daily activities (think: Alzheimer’s), then you may need a guardian to be legally responsible for you. This document allows you to designate, while you are still competent, who that guardian should be (or more importantly, should NOT be).
The formal name of this document is the “Directive to Physicians and Family or Surrogates.” It communicates your wishes regarding the use of life-sustaining technology, or life support, when you have a “terminal condition” or an “irreversible condition,” both as defined in the document. It also designates who is to act on your behalf to implement your decision, when the time comes. Usually that is the agent under your Medical Power of Attorney.
Directive Regarding Disposition of Remains
This document allows you to state the what, where, and how you would like your body to be treated after your death. You can set forth your preference as to burial or cremation, state whether you want to make an anatomical gift, give any instructions with regard to disposal of ashes, and direct your family to prepaid plans you may have. This Directive also appoints the agent who will have the authority to make your final arrangements.
Estate planning involves more than just determining what happens when you die. It is also an important protection for yourself while you are alive, possibly at a time when you are most vulnerable. Take the time to think about who you would want stepping into your shoes when making financial and medical decisions, and seize the opportunity to make your wishes known. Schedule a consultation with one of our experienced estate planning attorneys today to have your will and ancillary documents drafted.