Many people think estate planning is only about what happens after death. In reality, some of the most important estate-planning documents protect you and your family while you are alive.
If an accident or illness leaves you unable to communicate, someone may need authority to manage your finances, speak with medical providers, or make health care decisions for you.
Without the proper documents, even a spouse, parent, or adult child may encounter delays or need court involvement.
A Durable Financial Power of Attorney
A durable financial power of attorney allows you to authorize a trusted person—called an agent or attorney-in-fact—to handle specified financial and legal matters.
Depending on how the document is written, that authority may include:
- Paying bills.
- Communicating with financial institutions.
- Managing property.
- Handling insurance matters.
- Addressing certain business or tax issues.
- Taking other authorized actions on your behalf.
A power of attorney should be carefully prepared. It should provide enough authority to be useful without granting powers you do not understand or intend.
An Advance Health Care Directive
A California advance health care directive allows you to name an agent to make health care decisions if you cannot make or communicate those decisions yourself.
It can also express your preferences concerning treatment, end-of-life care, pain relief, organ donation, and other health care matters.
Choosing the right agent is important. The person should be willing to follow your wishes, communicate with medical professionals, and make difficult decisions under pressure.
A HIPAA Authorization
Federal and state privacy rules may limit what health care providers can disclose. A HIPAA authorization can identify the people who are permitted to receive protected health information.
Access to information and authority to make decisions are not necessarily the same thing. For that reason, a comprehensive plan may include both an advance health care directive and a separate HIPAA authorization.
What Changes When Your Child Turns 18?
A child’s eighteenth birthday creates an important legal change: your child is now an adult.
Parents do not automatically retain authority to access an adult child’s medical information, direct medical care, speak with a college, or manage the child’s financial affairs. This can surprise families when an adult child is injured, hospitalized, studying away from home, or traveling.
An adult child should consider signing their own:
- Advance health care directive.
- HIPAA authorization.
- Durable financial power of attorney.
- Emergency contact and information documents.
These documents do not take away the young adult’s independence. The young adult chooses whom to authorize and what authority to grant.
Does a Living Trust Replace These Documents?
No. A living trust generally governs property owned by or transferred to the trust. It does not replace an advance health care directive, and it may not give a successor trustee authority over property outside the trust.
A coordinated estate plan uses different documents for different purposes:
- The trust manages trust property.
- The financial power of attorney addresses authorized financial matters outside the trust.
- The advance health care directive addresses medical decisions.
- The HIPAA authorization permits access to protected health information.
Planning Now Can Prevent a Crisis Later
The worst time to discover that important documents are missing is during an emergency. Preparing them in advance allows you to decide who should help, what authority that person should have, and how your wishes should be carried out.
Family First Legal Services, P.C. helps California individuals, parents, and families create coordinated plans for incapacity and other emergencies. To begin, Schedule a Peace of Mind Planning Session (consultation) or schedule a 15 minute call by clicking either link below.
This article provides general educational information and is not legal advice. The appropriate documents and language depend on each person’s circumstances. Reading this article does not create an attorney-client relationship.