Most people don't want to think about getting sick. Unfortunately, not thinking about it doesn't make it any less likely to happen. Having a plan in place ahead of time can greatly reduce the stress on you and your loved ones if the worst does happen. To cover these issues, a good estate plan should at least include the following:
Medical Power of Attorney (MPOA). Sometimes the terms "living will" or "healthcare proxy" are also interchangeably used for this document. At a minimum, an MPOA specifies a "healthcare representative" who will make healthcare decisions for you when you're not able to, and allows medical facilities to release information to that person so that he or she can make informed decisions.
After passage of the HIPAA Act in the 1990s, this document became even more important. Because HIPAA increased the penalties on healthcare providers for releasing a person's personal healthcare information without prior authorization, hospitals and doctors have become very skittish about releasing healthcare information to anyone other than the patient. It is therefore very important that your MPOA is specifically drafted with HIPAA language allowing the release of your healthcare information to your healthcare representative.
This document also can prevent large amounts of family strife. The MPOA designates which of your family members has the ultimate say over end of life and other healthcare decisions. This can prevent unfortunate emotional fights among family members during a difficult time.
Lastly, an MPOA can provide instructions to your healthcare representative. These instructions can designate when life saving measures should be removed. They can also provide guidance about donation of tissue and organs or any other medical issue you can imagine. Specific instructions aren't necessary if you'd rather your chosen healthcare representative have discretion over healthcare decisions.
General Durable Power of Attorney (POA). Just as an MPOA appoints a representative for you over your healthcare matters, a POA appoints a representative over your legal and financial matters. A POA can be set up to take effect immediately upon signing, or can instead be set up to "spring" into effect only after you are no longer able to handle your own affairs. The person appointed under your POA is authorized to sign checks, pay bills, and handle most other legal and financial matters. Many times the powers in the POA allow your loved ones to not have to go to court to be appointed your guardian when you are unable to take care of yourself. On the other hand, in the unfotunate event that you do end up needing a court-appointed guardian, you can specify in your POA ahead of time who you would like that guardian to be. This can prevent family conflicts down the road.
Planning for Long Term Care. The best long term care planning is buying long term care insurance while middle aged (or younger). This reduces or eliminates the possibility that all of your assets will be lost to Medicaid or a nursing home in your later years. On the other hand, if you're no longer young enough to purchase long term care insurance, there may still be some options that we can discuss.
Hopefully this has been an informative introduction to planning for future health issues. If you have any questions about planning for future health issues, or would like more details, feel free to contact me.
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