Friday, October 3, 2014

To Your Health

Pathways Advisory Group, Inc.
Michelle Carter, CFP®

In case you missed it from the March 2011 Newsletter...

Completing your estate planning can be quite an adventure… Do I need a Trust, or can a Will suffice?  What about a Community Property agreement?  Should I name a person or my Trust as the beneficiary on retirement accounts?  These are some of the questions you and your attorney may work through.

Some people will have Simple Trusts, others may have Complex Trusts, and still others don’t need a Trust at all.  However, there is one important topic I have seen addressed in virtually every estate planning package I’ve reviewed…Healthcare.

I’ve heard attorneys mention several times that everyone needs to address healthcare in their estate plan.  Whether you are a college student just starting out, or a financially independent retiree, planning ahead for health-related issues seems to be of great importance. 

It can be a bit intimidating…Directives, HIPPA, Power of Attorney…what does all that mean? 

I present to you, Healthcare Planning 101:

Advance Healthcare Directive:

An "advance health care directive" lets your physician, family and friends know your health care preferences, including the types of special treatment you want or don't want at the end of life, your desire for diagnostic testing, surgical procedures, cardiopulmonary resuscitation and organ donation.

By considering your options early, you can ensure the quality of life that is important to you and avoid having your family "guess" your wishes or having to make critical medical care decisions for you under stress or in emotional turmoil.

Durable Power of Attorney for Healthcare:

A Durable Power of Attorney for Healthcare is a legal document that allows an individual to appoint someone else (proxy or agent) to make medical or health care decisions, in the event the individual becomes unable to make and/or communicate such decisions personally.

Durable refers to a power of attorney that remains in effect if the individual becomes incapacitated. If a power of attorney is not specifically made durable, it automatically expires if the principal becomes incapacitated.

HIPAA Release:

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is designed to protect your medical privacy.  Unfortunately, it can also restrict your spouse, children, or appointed agents from accessing any information on your health care condition.  The trustees of your trust or agents under your Power of Attorney for Health Care may find it difficult to access the information they need to prove your incapacity in order to take over your financial decisions or health care decisions.  Additionally, once they are serving as your agents, they may have trouble gathering the information needed to process your health insurance or Medicare claims.

To avoid this situation, you may have your Power of Attorney or Advance Health Care Directive updated to include the “HIPAA Release” information.  This will allow your family members and/or trustees and agents to obtain the necessary information on your health care condition, and to take over your finances in the event you are unable to do so yourself.

These important documents can bring some security, not only if an unexpected crisis occurs, but beforehand as well.  There is peace of mind in knowing your loved ones will have the forms and guidance needed during a difficult time.

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This article is for information purposes.  We are not attorneys and do not give legal advice.