As a financial planner, one of the topics that I always bring up with my clients, although most of them don’t like to discuss it, is estate planning. Estate planning is relevant for everyone, no matter how much money you have or how old you are. Typically, people think of Wills when it comes to estate planning – who gets what when you pass away. But estate planning also includes powers of attorney and HIPAA authorizations and these documents are relevant for everyone over the age of 18.
Powers of attorney name a person who can act on your behalf if you are unable. A medical power of attorney names a person who can make medical decisions on your behalf if you are unable to do so. A durable power attorney names a person who can step in to handle your financial affairs if you are unable to do so. A HIPPA authorization allows healthcare providers to share information regarding your health with anyone that you name.
Consider this real-world example of when a having a HIPAA authorization and medical power of attorney in place could be critical. Your 18-year old child just started their first year of college out-of-state. Your child gets into an accident and is taken to the hospital. Your child’s friend calls you to tell what happened, but your son or daughter is unable to communicate with you. You call the hospital to find out what is going on. Even though you are the parent and your child is covered under your health insurance, the hospital does not need to discuss your child’s medical situation with you. These doctors and nurses do not know you, they have not met you face-to-face as you are out of town and quite simply, they have no obligation or responsibility to talk to you. In fact, often they will choose not to disclose any information to you due to patient privacy concerns. As a parent, this entire scenario would be an incredible nightmare. But if you had the right documents in place, much of the aggravation and stress and fear could be completely alleviated so that you could focus your energy on getting your child the proper medical treatment.
Putting the necessary documents in place does not need to be a costly endeavor. While we advise using an attorney to draft these documents to be sure that everything is worded correctly, these forms can be found on the internet and having signed documents in place is what is most important.
Estate planning requires us to think about worse-case scenarios in advance. None of us this like to do this. But is our responsibility – to our children, to our families and to those who care about us.