Durable Powers of Attorney and Healthcare Proxies
Health and safety are paramount concerns, so step one in the planning process is choosing your designated agents and executing durable powers of attorney and healthcare proxies. If something happens that renders you unable to manage your affairs, you are considered “incapacitated.” Sometimes, as in the case of a coma, it isn’t clear whether an incapacity will be temporary or permanent.
An effective and reliable way to protect yourself and your assets is to appoint someone to act as your agent in the event of your incapacitation, and execute a durable Power of Attorney (POA).
Another tool is a healthcare proxy. Each of these delegates the power to make important decisions to people you trust and designate. A durable power of attorney can include the power to make financial, legal, and even healthcare decisions in your behalf. A healthcare proxy is limited to making healthcare decisions. Your signature on these legal documents is presumed genuine if acknowledged before a notary or another person authorized to take acknowledgements.
Of course, signing a power of attorney or healthcare proxy does not take away your right to make decisions for yourself. So long as you have the capacity to do so, you can revoke these documents, or execute new ones as you see fit. The point is not to divest yourself of any authority or responsibility, but to make sure your wishes and affairs are carried out, if something happens to you, by someone you trust.
When someone is incapacitated and they have not executed a power of attorney or healthcare proxy, their family members may have to go to court and seek the appointment of a guardian to make financial, legal, or health care decisions. That can be expensive and stressful, especially if there is disagreement within the family. It can also interfere with taking necessary steps to protect assets since many actions under Guardianship will need court approval.
Under the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), medical professionals cannot release health care information to anyone without a signed release or a court order. For this reason, HIPAA releases, also known as “medical authorizations,” are included in durable powers of attorney and healthcare proxies. In practice, what this means is that most healthcare providers will accept HIPAA releases signed by your proxy if they attach a copy of the POA or healthcare proxy.
If, however, you want to give different people different degrees of authority—e.g., give your child access to records but leave healthcare decisions only to your spouse—you may want to execute separate healthcare proxies. This can be helpful if you simply want family members to be able to communicate with medical providers, e.g., with respect to an upcoming medical procedure. These situations arise quite often, so your estate plan should include a HIPAA release as well as a durable power of attorney and healthcare proxy.