The “Life” Side of Estate Planning
So often, when we think about estate planning, we think about the dying process – not a very comfortable subject to face. While death and making sure you have a plan in place for what happens to your assets after you pass away is very important, it’s not the only subject we handle throughout the estate planning process. The “life” side of estate planning is just as important when we are drafting your comprehensive plan. Setting aside wills and trusts, the “life” side of estate planning generally focuses on a careful drafting of the following documents:
1) Power of Attorney:
Your Power of Attorney is a critical document – it’s primary function is to select an agent that you trust to step forward to make financial decisions for you in the event that you can’t make them for yourself. For example, if our client is in a car accident that leaves them in a coma, or complications arise after a surgery and our client is unable to handle their financial affairs, they will have selected a trusted agent (and one or multiple backup agents in the event that their primary choice is unwilling or unable to serve in the role) to step forward to handle all financial matters for them as a fiduciary. A fiduciary is someone who must act in the best interest of the person they are serving. There can be civil and even criminal implications if a fiduciary acts in ways that are not in the principal’s best interest.
Your Power of Attorney agent can sign contracts for you, access your funds in different accounts to make sure your mortgage/rent is paid, insurance is paid, and works to make sure everything is taken care of while you are not able to look out for yourself. We include HIPAA waivers in our Powers of Attorney, which mean that the Power of Attorney agent won’t have to deal with medical privacy laws complicating their efforts in serving your interests. The Power of Attorney is only effective while the signer is living – the second the signer passes away, the document is no longer in effect.
2) Advance Medical Directive:
The Advance Medical Directive is thought of as the other side of the coin from the Power of Attorney. The Advance Medical Directive also goes by other names (Living Will, Medical Power of Attorney, Designation of Healthcare Proxy are just a few), but what the document accomplishes is to name your agent who will make your medical decisions for you in the event that you cannot make them for yourself. In addition to that, we also include as much detail as our clients would like in regard to their medical preferences so the agent is not having to rely on guesswork to make decisions that the signer of the document would have wanted. Life prolonging measures are always a topic we cover – the removal of life prolonging measures and under which circumstances usually are important decisions for our clients. This document is also only effective while the drafter is living, and we always include a HIPAA waiver in this document as well.
3) HIPAA Waiver (Standalone document)
Okay – I know we’ve covered this one a couple of times now, but HIPAA is a body of law that covers medical privacy. HIPAA protections make sure that a person’s medical history, conditions, documentation and treatments all remain completely confidential. However, when it comes to the estate planning conversation, it often gets in the way for our client’s families. For example, if one of our clients is in an accident and gets rushed to the hospital, the last thing anyone would want is for a child of our client to get to the hospital first, but they can’t be told anything by medical professionals because the HIPAA laws prevent disclosure of any detail. We draft a HIPAA Waiver to list all individuals our clients would like to waive medical privacy for to make sure that if they were to rush to the hospital, the medical professionals could share prognosis, medical details, and paths forward.
These three documents are by no means the only “life” side considerations we make when working with clients, but they go to show that the estate planning process covers more than inheritance after passing away. Every client has a unique familial circumstance and needs carefully written documents to ensure what will happen in the event a catastrophe occurs. Give us a call at Wakefield Law to discuss and see if we can help you get started! 703-771-9740