Ensuring Continued Management of Affairs Upon Incapacitation
If you or a loved one becomes disabled or incapacitated due to a neurodegenerative disease such as Alzheimer’s, dementia, ALS/Lou Gehrig’s Disease, Huntington’s Disease, or Parkinson’s Disease, it is advisable to establish a Durable Power of Attorney (DPOA).
A DPOA is a document that authorizes another person to manage your financial affairs if you become disabled or incapacitated. That person is called an agent or an attorney-in-fact. Most people choose their spouse or domestic partner, a trusted family member, or a friend.
Generally, any individual over the age of majority (age 18 in Massachusetts) who is legally competent can establish a Power of Attorney. Without one, it may be necessary for a loved one, such as your spouse or adult child, to petition a court to be appointed as guardian or conservator to make decisions for you when you are incapacitated. This guardianship process is time-consuming and expensive, often costing thousands of dollars, and it can be emotionally draining for your family.
There are generally two types of Durable Powers of Attorney:
- Present Durable Power of Attorney – Power is immediately transferred to your attorney in fact
- Springing or Future Durable Power of Attorney – Takes effect upon your subsequent disability as determined by your doctor.
Other documents that should be created and included in your planning for potential incapacitation are a Durable Power of Attorney for Health Care, a Living Will, and a HIPAA Authorization.
Durable Power of Attorney for Health Care
The law allows you to appoint someone to make medical treatment decisions if you lose the ability to decide for yourself. You can do this by creating a “Durable Power of Attorney for Health Care” or a Health Care Proxy, in which you designate the person or persons to make such decisions on your behalf. You can allow your health care agent to decide about all health care or only about certain treatments. You may also give your agent instructions to follow. Your agent can then ensure that health care professionals follow your wishes and decide how your wishes apply as your medical condition changes. Hospitals, doctors, and other health care providers must follow your agent’s decisions as if they were your own.
Living Will
A Living Will informs others of your preferred medical treatment should you become permanently unconscious, terminally ill, or otherwise unable to make or communicate decisions regarding treatment. In conjunction with other estate planning tools, it can bring peace of mind and security while avoiding unnecessary expense and delay in the event of future incapacity.
HIPAA Authorization
Some medical providers have refused to release information, even to spouses and adult children authorized by the Healthcare Power of Attorney, on the grounds that the 1996 Health Insurance Portability and Accountability Act, or HIPAA, prohibits such releases. Therefore, as part of your incapacity planning, you should sign a HIPAA authorization form that allows the release of medical information to your agents, successor trustees, family or any other individuals you wish to designate.