Health Care Documents
Every person age 18 or older should have a Health Care Proxy and HIPAA Authorization. The Health Care Proxy names decision-makers in case of incapacity and specifies wishes in various life-threatening scenarios. A HIPAA Authorization allows designated individuals to access your health care information. Without these documents in place, your family may need to petition the Probate Court for a Guardianship over you if you become incapacitated. This is a costly and time-consuming process.
Also remember that once a child turns 18, his or her parents lose all parental rights. Thus, the parents are not automatically entitled to make health care decisions and cannot access the child’s health care information. This can cause tremendous chaos if the child has an accident or illness, including while away at college. Thus, while my clients do their estate planning, I encourage them to have Health Care Proxies and HIPAA Authorizations drafted for any adult children.
Power of Attorney
A Power of Attorney appoints people to handle your financial, property and other legal affairs, particularly if you become incapacitated. The people you name as your powers of attorney need not be the same as your Health Proxies. If a person becomes incapacitated and does not have a valid Power of Attorney, the family will likely be unable to manage the person’s financial affairs, sign contracts, or take similar actions without petitioning the Probate Court for a Guardianship or Conservatorship. Therefore, a Power of Attorney is a critical part of any estate plan.
Note that while state law generally provides that Powers of Attorney do not expire, many financial institutions have their own rules regarding when a Power of Attorney will be honored. Some demand that the document not be more than 3-5 years old, or that it contain certain specific provisions which many boilerplate Powers of Attorney do not contain. Thus, I encourage people to have their Powers of Attorney updated at least every 5 years and to ensure the document was drafted by a lawyer who specializes in estate planning and is thus familiar with the language financial institutions prefer.