Long-Term Care Planning: Is a Reverse Mortgage your best option?

 

Recently, I heard a story about a family who used a reverse mortgage. The mother has Alzheimer’s but is in great physical health. The father was in good health and was caring for the mother. The son was recently out of work and decided it would be a good time to move back to help his father care for his mother. The parents recently qualified for Medicaid, but had a reverse mortgage line of credit to help in the event of emergencies. The house is worth $175,000.00 and they owe $35,000.00 on the reverse mortgage. The parents had intended to leave their estate, which consisted primarily of the house, to their son.

The father suffered a heart attack and passed away suddenly. The mother is physically “healthy as a horse,” as are many people who suffer from Alzheimer’s, and may have many years of life left. The son, however, may not be able to provide care for her for the rest of her life.

THE PROBLEM: If the mother has to go into a nursing home and is there for over a year, the reverse mortgage will be called. The mother and son, unable to repay it, will lose the house. The mortgage company will auction or sell the house and any money left over from the sale will go back to the mother, which will kick her off Medicaid. The parents’ lives of hard work to pay off their home and to have something to pass on to their loyal son may be lost in the blink of an eye.

When the parents obtained the reverse mortgage, this term of the mortgage was probably either not clear to them, or was something that they did not take the time to think through.

An Elder Law Attorney could have helped this family review and evaluate the reverse mortgage, as well as advise them about other planning options, to determine the best course of action to both stay at home as long as possible and to preserve their house.

For instance, Medicaid regulations allow transfers between spouses without penalty. It may have been a good option to transfer the house to the father, possibly reserving a life estate for the mother, and the father could have left the house to the son in his Will.

Second, Medicaid regulations also allow a parent to transfer a house to a child who has been living in the home and providing care for two or more years, which has kept the parent out of the nursing home. Depending how long the son is able to provide care for his mother, this may also have been an alternate option.

Reverse mortgages can be the right decision for some people. Many people wish to remain in their homes for as long as possible, rather than go to a nursing home or assisted living facility. Many of those people also have a bulk of their assets invested in their home’s equity. Reverse mortgages can provide access to cash which people can use to pay for in-home care services that will help them stay in their homes longer, and that can be a very good thing. Sometimes a reverse mortgage is the only way to afford to remain in the home, but there may be other options as well. An Elder Law Attorney can advise you about those other options and help you evaluate which option is right for you.

The good news is that this family may still have some options. The mother may be able to access the line of credit to pay the son for his caregiving services. Under North Carolina’s Medicaid regulations, though, the mother cannot just pay the son – they need to have a written and signed caregiver contract, and it is essential that such a contract is prepared by an Elder Law Attorney who knows the Medicaid requirements imposed on these types of contracts.

 

Tax Free Planning Opportunity for Long Term Care Expenses

 

This posting is courtesy of attorney Marc Soss of Florida:

The aging demographics of the United States coupled with the Pension and Recovery Act of 2006 (the "PPA”) and Deficit Reduction Act of 2007 (“DRA”) have provided an excellent planning opportunity to create tax efficient vehicles to solve a clients’ long-term care planning needs. Beginning on January 1, 2010, a tax-free planning option will become available for individuals who desire to provide for long-term medical care by utilizing an existing annuity or life insurance contract purchased after 1996. While not a new concept (it dates back to 1997), the 2010 tax-free planning opportunity may be beneficial to an individual with a larger than needed life insurance policy death benefit, unaffordable monthly or annual premiums, an under-performing or matured deferred annuity contract, or the desire to incorporate long-term medical care into his or her estate plan. 

 

 

Under the PPA provisions, annuity funds may be withdrawn completely tax-free on a FIFO (First-in, First-out) basis for long-term care benefits (amending Section 72(e) of the Internal Revenue Code). The PPA also includes a “1035 exchange” option which allows for the tax-free and penalty free basis withdrawal of the entire annuity value for qualified long term care expenses. However, no income tax deduction will be allowed for any payment made from the cash surrender value of a life insurance contract or the cash value of an annuity contract for coverage under a qualified long-term care insurance contract (Section 213(a) of the Code).

This benefit is further enhanced by the modification of the Medicaid “look back” period from thirty-two (32) months to sixty (60) months for transferred assets, and the authority for all states to adopt “partnership long term care insurance plans” under the DRA. The qualified partnership plans allow an insured to “exclude an amount of assets equal to the value of the benefits purchased in a long-term care partnership policy from Medicaid qualification.”  

Implications:

The benefits of converting an existing annuity or life insurance contract include (i) no surrender charge will apply to account withdrawals for qualifying long-term care expenses; (ii) withdrawals for qualifying long-term care expenses will be categorized as a tax-free reduction of basis; (iii) a spouse can be added to a policy for long-term care purposes; (iv) ten (10%) percent free withdrawal provision for non-long term contract withdrawals; (v) the ability to purchase an optional lifetime long-term care provision with guaranteed premiums; and (vi) the annuity’s cash will remain available if the long-term care portion of the policy is never utilized. However, the conversion will also result in (i) the commencement of a new surrender charge period for the contract; (ii) medical underwriting (at a time when the individuals health may be declining); (iii) health care benefits that are limited in scope and to a specified number of years; and (iv) the cost of the long-term care rider reducing the annuity’s tax-deferred income stream. In addition, the typically policy will contain a two-year waiting period from the time the annuity is purchased before benefits can be activated and a 90-day “elimination period” once a claim is filed.

Conclusion:

A hybrid policy of this nature should not be used as a substitute for comprehensive long-term care insurance. It is recommended that these policies only be utilized when an individual can’t afford or is uninterested in comprehensive long-term care insurance.

Marc J. Soss, Esquire practices in the areas of estate and tax planning; probate, trust and guardianship administration and litigation; and corporate law in Southwest Florida.   Marc has published numerous articles and been quoted in the Forbes.Com, Fox Business, Naval Reserve Association Magazine, Rhode Island Bar magazine, Bradenton Herald, Lawyers USA, and Military.com.

 

Helping an Aging Parent

A parent’s well being is a growing concern for many adult children who watch as a parent ages and perhaps encounters difficulties which are new to the entire family. The issues an aging parent may encounter can seem overwhelming and a child may not know where to turn for assistance. There are many services adult children can utilize as, or before, needs arise.  

At the forefront of most people’s minds is ensuring an aging parent’s day-to-day safety. For some, living at home is still an option, while others may require services that only an assisted living facility can provide. Unfortunately, it is often after an accident where a parent’s safety is at issue that families realize a decision must be made. However, there are steps that can be taken before an incident occurs to ensure an aging parent’s safety and comfort. 

Geriatric Care Coordinators are professionals, often with experience in nursing or related medical fields, who can assist families in making decisions and implementing a plan regarding living arrangements based upon the needs of the individual. Care coordinators can evaluate a situation and help determine how your parent’s needs will best be met. Once a decision is made, the coordinator can help choose a facility, locate an appropriate home health care provider or recommend someone to assist with cooking and other household tasks. 

Most Geriatric Care Coordinators provide many other services, as well. They can, for example, act as advocates or liaisons between a family and medical providers, assist with insurance or medication issues, accompany your parent to doctor appointments, or transition a parent back into a regular routine after a hospital stay.

Another concern which must be addressed is ensuring a parent’s estate planning documents are up to date and in order. A complete plan should include a will, general power of attorney, health care power of attorney, living will, and HIPAA authorization. If your parent will be undergoing any type of medical treatment, or may be expected to in the future, it is particularly important to ensure these documents are current. Original documents should be stored in a safe place easily accessible to the appropriate people, such as the agent under a general or health care power of attorney. If a parent’s documents need work, you should help your parent locate an attorney specializing in estate planning.

Attorneys can also provide advice with other Elder Law issues, such as laws regulating Medicaid and Social Security, planning for retirement and long term insurance coverage. It is important to remember that even if you make the appointment and accompany your parent to the attorney’s office, your parent will be the attorney’s client. The attorney may ask to speak to your parent without you present and will certainly consider your parent’s wishes above all else. In some serious cases, if the attorney doubts your parent’s competency, the attorney may not be able to proceed with representation of your parent. In such a case it may be necessary to institute a guardianship proceeding. 

Another important consideration is financial planning for your parent. Certainly, you will want to ensure your parent has adequate resources for the years to come. It is also important to help your parent consolidate bank and other accounts to alleviate the complexity of managing multiple accounts. A brokerage account can be a simple and secure method to easily manage your parent’s stocks. 

For more information on these and other options, contact an attorney who practices Elder Law. The attorney will be able to assist you with legal concerns and refer you to Geriatric Care Coordinators and Financial Planners in your parent’s community.  

Using a Professional Care Manager

This article is from the website of the National Care Planning Council.

Services from care managers should be something that every family takes advantage of, but in reality very few families use them. Care managers could go a long ways towards helping the family find better and more efficient ways of providing care for a loved one.

The concept is simple. The family hires a professional adviser to act as a guide through the maze of long term care services and providers. The care manager has been there many times. The family is experiencing it usually for the first time.

Hiring a care manager should be no different than hiring an attorney to help with legal problems or a CPA to help with tax problems. Most people don't attempt to solve legal problems on their own. And the use of professional tax advice can be an invaluable investment. The same is true of using a care manager.

Unfortunately there are too few care managers and the public is so poorly informed about the services of a care manager, that valuable resources that could be provided go lacking.

The irony of not using a care manager is that most families -- when given the opportunity to use the care manager -- think they can do it themselves and will not pay the money. Yet the services of a care manager most likely will save them considerably more money then do-it-yourself. The cost of the care manager might be only a fraction of the savings the care manager could produce. Care manager services can also greatly reduce family and caregiver stress and help eliminate family disputes and disagreements.

Even the Yellow Pages do not cooperate in helping the public find care managers. To find a care manager one must look in the Yellow Pages under "Senior Services". Who is going to know to look under that subject?

Below is a partial list of what a care manager might do:

  1. Assess the level and type of care needed and develop a care plan
  2. Take steps to start the care plan and keep it functioning
  3. Make sure care is received in a safe and disability friendly environment
  4. Resolve family conflicts and other family issues relating to long term care
  5. Become an advocate for the care recipient and the family caregiver
  6. Manage care for a loved one for out-of-town families
  7. Conduct ongoing assessments to monitor and implement changes in care
  8. Oversee and direct care provided at home
  9. Coordinate the efforts of key support systems
  10. Provide personal counseling
  11. Help with Medicaid qualification and application
  12. Arrange for services of legal and financial advisors
  13. Manage a conservatorship for a care recipient
  14. Provide assistance with placement in assisted living facilities or nursing homes
  15. Monitor the care of a family member in a nursing home or in assisted living
  16. Assist with the monitoring of medications
  17. Find appropriate solutions to avoid a crisis
  18. Coordinate medical appointments and medical information
  19. Provide transportation to medical appointments
  20. Assist families in positive decision making
  21. Develop long range plans for older loved ones not now needing care

Let's look at two hypothetical examples to see how a care manager could be used.

Here is the first example:

Mary is taking care of her aging husband at home. He has diabetes and is overweight. Because of the diabetes her husband has severe neuropathy in his legs and feet and it is difficult for him to walk. He also has diabetic retinopathy and cannot see very well. She has to be careful that he does not injure his feet since the last time that happened he was in the hospital for four weeks with a severe infection. She is having difficulty helping him out of bed and with dressing and using the bathroom. She relies heavily on her son who lives nearby to help her manage her husband's care.

On the advice of a friend Mary is told about a care manager, Susan Brown, who helped the friend's family cope with the care of a loved one. The cost of an initial assessment and care plan from the care manager is $300.00. Mary thinks she has the situation under control and $300.00 for someone from the outside to come in and tell her how to deal with her situation seems ridiculous.

One day Mary is trying to lift her husband and injures her back severely. She is bedridden and cannot care for her husband. Her son, who works fulltime, now has two parents to care for. On the advice of the same friend he decides to bring in Susan Brown and pay her fee himself.

Susan does a thorough assessment of the family's needs. She arranges for Mary's doctor to order Medicare home care during Mary's recovery. Therapists come in and help Mary with exercises and advice on lifting. Susan advertises for and finds a private individual who is willing to live in the home for a period of time to help Mary with her recovery and watch over her husband. Susan makes sure the new caregiver is reliable and honest and that taxes are paid for the employment. Susan enlists the support of the local area agency on aging and makes sure all services available are provided for the family. Susan also calls a meeting with Mary's family and explains to them the care needs and how they need to commit to help with those needs. Susan makes arrangements to purchase medical equipment for lifting, moving and easier use of the bathroom facilities. Medicare will pay much of this cost.

Susan suggests using a geriatric care Physician she works closely with to help Mary in the care of her husband. The geriatrician meets with Mary and her husband and spends a great deal of time explaining the proper treatment and care of elderly with diabetes. He rearranges medications and puts Mary's husband on a new insulin regimen to better control his blood sugar. He starts a strict diet and insists on weight loss and exercise. The previous doctor seemed more interested in treating symptoms than in changing lifestyles. In contrast to this attitude, the geriatric Physician feels that Mary's husband has a chance of improving his health with proper treatment.

Susan also works closely with an elder law attorney and a financial planner who specializes in the elderly. The attorney prepares documents for the family including powers of attorney, a living will and advice on preserving Mary's remaining assets. The financial planner recommends a reverse mortgage specialist to help Mary and her husband tap unused assets in their home's equity. In addition, an income vehicle is put into place to convert assets into income in order to provide for Mary for her life when her husband is gone. And finally, with the help of the financial planner, an application for veterans benefits is made for Mary's husband who is a veteran. Depending on the monthly cost of care this additional income could provide up to $1,800 more a month in household income.

With the help of the care manager, Mary's life and future have been significantly improved. Her husband as well, if he adheres to the care plan, may end up having a better quality of life for his remaining years.

Here is another example of the value of the care manager.

Michelle is a single divorced mother with two teenage children. Her mother, Martha, has a stroke which apparently causes some memory loss as well as some disability in being able to fend for herself. Michelle decides to move in with her mother and take care of her. In return, Michelle who is temporarily out of work, has a place to live and share her mother's retirement income.

Martha is anything but easy to take care of. She has mood swings and often forgets what she is doing. She seems to display a lot of anger and takes it out on Michelle, calling her all kinds of horrible names. She is never happy and is constantly calling for attention. In trying to take care of her own children as well as her mother, Michelle is quickly being drained of her physical and emotional strength. In addition Michelle's brother and two sisters are happy she is taking care of her mother since they are now absolved of the responsibility, but they treat Michelle terribly. They also call her awful names and accuse her of being a "leech". On the other hand they have plenty of advice on how to deal with their mother but never offer any of their own time to help. After all, they reason, Michelle is receiving benefits from caring for her mother and logically she should be responsible for all the care.

On the advice of a friend, Michelle hires a care manager, Brent Smith, who comes highly recommended in solving family disputes. Brent is a certificated mediator. Brent first does a care assessment of Martha and comes away suspecting there is more to her personality disorder than a stroke. He makes arrangements to take Martha to a geriatric Physician who does a complete physical assessment and recognizes that Martha's mental state is due more to improper medications and severe depression. Martha's medications are reduced and changed and she is put on antidepressants. In addition her diet is upgraded, she is to receive more fluids, more healthy foods and especially receive vitamin supplements. Particularly important is a prescription for vitamin B12 shots.

The doctor insists on as much exercise as Martha can handle. Brent, the care manager, helps convince Martha of the need for her new care program and helps oversee her following through on the exercise program. Over the ensuing months Martha's lack of memory and abusive behavior become less severe. She is also better able to care for herself without Michelle's assistance.

In addition to the assessment, one of the first things Brent does is to contact Michelle's older brother who is the family leader. He has a long talk with her brother and gives the brother a different perspective on the issues. With a better understanding of the situation, the brother calls a family meeting and Brent mediates a successful resolution of the family mistreatment of Michelle and the ensuing bad feelings. Everyone including Michelle is called upon to do their part in managing the care of her mother and to work on better family relations. The issue of Michelle "sponging" off of her mother is addressed and an adequate solution is agreed to by all. Brent will follow up in a month to make sure everyone is following through on his or her commitment.

These two examples concentrate on care in the home but care managers are also actively involved in helping families with the selection of facilities and any appropriate care services. Finally, care managers are indispensable in helping coordinate and arrange for care for a loved one living far away from family members.

Services from care managers should be something that every family takes advantage of, but in reality very few families use them. Care managers could go a long ways towards helping the family find better and more efficient ways of providing care for a loved one.

The concept is simple. The family hires a professional adviser to act as a guide through the maze of long term care services and providers. The care manager has been there many times. The family is experiencing it usually for the first time.

Hiring a care manager should be no different than hiring an attorney to help with legal problems or a CPA to help with tax problems. Most people don't attempt to solve legal problems on their own. And the use of professional tax advice can be an invaluable investment. The same is true of using a care manager.

Unfortunately there are too few care managers and the public is so poorly informed about the services of a care manager, that valuable resources that could be provided go lacking.

The irony of not using a care manager is that most families -- when given the opportunity to use the care manager -- think they can do it themselves and will not pay the money. Yet the services of a care manager most likely will save them considerably more money then do-it-yourself. The cost of the care manager might be only a fraction of the savings the care manager could produce. Care manager services can also greatly reduce family and caregiver stress and help eliminate family disputes and disagreements.

Even the Yellow Pages do not cooperate in helping the public find care managers. To find a care manager one must look in the Yellow Pages under "Senior Services". Who is going to know to look under that subject?

Below is a partial list of what a care manager might do:

  1. Assess the level and type of care needed and develop a care plan
  2. Take steps to start the care plan and keep it functioning
  3. Make sure care is received in a safe and disability friendly environment
  4. Resolve family conflicts and other family issues relating to long term care
  5. Become an advocate for the care recipient and the family caregiver
  6. Manage care for a loved one for out-of-town families
  7. Conduct ongoing assessments to monitor and implement changes in care
  8. Oversee and direct care provided at home
  9. Coordinate the efforts of key support systems
  10. Provide personal counseling
  11. Help with Medicaid qualification and application
  12. Arrange for services of legal and financial advisors
  13. Manage a conservatorship for a care recipient
  14. Provide assistance with placement in assisted living facilities or nursing homes
  15. Monitor the care of a family member in a nursing home or in assisted living
  16. Assist with the monitoring of medications
  17. Find appropriate solutions to avoid a crisis
  18. Coordinate medical appointments and medical information
  19. Provide transportation to medical appointments
  20. Assist families in positive decision making
  21. Develop long range plans for older loved ones not now needing care

Let's look at two hypothetical examples to see how a care manager could be used.

Here is the first example:

Mary is taking care of her aging husband at home. He has diabetes and is overweight. Because of the diabetes her husband has severe neuropathy in his legs and feet and it is difficult for him to walk. He also has diabetic retinopathy and cannot see very well. She has to be careful that he does not injure his feet since the last time that happened he was in the hospital for four weeks with a severe infection. She is having difficulty helping him out of bed and with dressing and using the bathroom. She relies heavily on her son who lives nearby to help her manage her husband's care.

On the advice of a friend Mary is told about a care manager, Susan Brown, who helped the friend's family cope with the care of a loved one. The cost of an initial assessment and care plan from the care manager is $300.00. Mary thinks she has the situation under control and $300.00 for someone from the outside to come in and tell her how to deal with her situation seems ridiculous.

One day Mary is trying to lift her husband and injures her back severely. She is bedridden and cannot care for her husband. Her son, who works fulltime, now has two parents to care for. On the advice of the same friend he decides to bring in Susan Brown and pay her fee himself.

Susan does a thorough assessment of the family's needs. She arranges for Mary's doctor to order Medicare home care during Mary's recovery. Therapists come in and help Mary with exercises and advice on lifting. Susan advertises for and finds a private individual who is willing to live in the home for a period of time to help Mary with her recovery and watch over her husband. Susan makes sure the new caregiver is reliable and honest and that taxes are paid for the employment. Susan enlists the support of the local area agency on aging and makes sure all services available are provided for the family. Susan also calls a meeting with Mary's family and explains to them the care needs and how they need to commit to help with those needs. Susan makes arrangements to purchase medical equipment for lifting, moving and easier use of the bathroom facilities. Medicare will pay much of this cost.

Susan suggests using a geriatric care Physician she works closely with to help Mary in the care of her husband. The geriatrician meets with Mary and her husband and spends a great deal of time explaining the proper treatment and care of elderly with diabetes. He rearranges medications and puts Mary's husband on a new insulin regimen to better control his blood sugar. He starts a strict diet and insists on weight loss and exercise. The previous doctor seemed more interested in treating symptoms than in changing lifestyles. In contrast to this attitude, the geriatric Physician feels that Mary's husband has a chance of improving his health with proper treatment.

Susan also works closely with an elder law attorney and a financial planner who specializes in the elderly. The attorney prepares documents for the family including powers of attorney, a living will and advice on preserving Mary's remaining assets. The financial planner recommends a reverse mortgage specialist to help Mary and her husband tap unused assets in their home's equity. In addition, an income vehicle is put into place to convert assets into income in order to provide for Mary for her life when her husband is gone. And finally, with the help of the financial planner, an application for veterans benefits is made for Mary's husband who is a veteran. Depending on the monthly cost of care this additional income could provide up to $1,800 more a month in household income.

With the help of the care manager, Mary's life and future have been significantly improved. Her husband as well, if he adheres to the care plan, may end up having a better quality of life for his remaining years.

Here is another example of the value of the care manager.

Michelle is a single divorced mother with two teenage children. Her mother, Martha, has a stroke which apparently causes some memory loss as well as some disability in being able to fend for herself. Michelle decides to move in with her mother and take care of her. In return, Michelle who is temporarily out of work, has a place to live and share her mother's retirement income.

Martha is anything but easy to take care of. She has mood swings and often forgets what she is doing. She seems to display a lot of anger and takes it out on Michelle, calling her all kinds of horrible names. She is never happy and is constantly calling for attention. In trying to take care of her own children as well as her mother, Michelle is quickly being drained of her physical and emotional strength. In addition Michelle's brother and two sisters are happy she is taking care of her mother since they are now absolved of the responsibility, but they treat Michelle terribly. They also call her awful names and accuse her of being a "leech". On the other hand they have plenty of advice on how to deal with their mother but never offer any of their own time to help. After all, they reason, Michelle is receiving benefits from caring for her mother and logically she should be responsible for all the care.

On the advice of a friend, Michelle hires a care manager, Brent Smith, who comes highly recommended in solving family disputes. Brent is a certificated mediator. Brent first does a care assessment of Martha and comes away suspecting there is more to her personality disorder than a stroke. He makes arrangements to take Martha to a geriatric Physician who does a complete physical assessment and recognizes that Martha's mental state is due more to improper medications and severe depression. Martha's medications are reduced and changed and she is put on antidepressants. In addition her diet is upgraded, she is to receive more fluids, more healthy foods and especially receive vitamin supplements. Particularly important is a prescription for vitamin B12 shots.

The doctor insists on as much exercise as Martha can handle. Brent, the care manager, helps convince Martha of the need for her new care program and helps oversee her following through on the exercise program. Over the ensuing months Martha's lack of memory and abusive behavior become less severe. She is also better able to care for herself without Michelle's assistance.

In addition to the assessment, one of the first things Brent does is to contact Michelle's older brother who is the family leader. He has a long talk with her brother and gives the brother a different perspective on the issues. With a better understanding of the situation, the brother calls a family meeting and Brent mediates a successful resolution of the family mistreatment of Michelle and the ensuing bad feelings. Everyone including Michelle is called upon to do their part in managing the care of her mother and to work on better family relations. The issue of Michelle "sponging" off of her mother is addressed and an adequate solution is agreed to by all. Brent will follow up in a month to make sure everyone is following through on his or her commitment.

These two examples concentrate on care in the home but care managers are also actively involved in helping families with the selection of facilities and any appropriate care services. Finally, care managers are indispensable in helping coordinate and arrange for care for a loved one living far away from family members.

Everyone Needs a HIPAA Authorization

In 2003 the U.S. Department of Health and Human Services finalized regulations under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). Under HIPAA, medical providers can face sanctions and monetary fines for unauthorized release of “Protected Health Information”. As a result, medical providers are very reluctant to release records to anyone other than the patient.

What Information is Protected

Under HIPAA, protected health information includes anything created or received by a “covered entity” relating to an individual’s physical or mental conditions or health care, and that could be used to identify the individual. Covered entities include health care providers, pharmacies, nursing facilities, and insurance companies, as well as other health care-related entities. 

Since the definitions under HIPAA are so broad and, as a result, medical providers will not release information to anyone other than a patient, a complete estate plan should always include a HIPAA authorization.     

How to Authorize Release of Protected Information

A traditional Health Care Power of Attorney (HCPOA) allows an individual to name an agent to make health care decisions when and if the individual is incapacitated and cannot make such decisions. Even if the document was prepared during or after 2004 and HIPAA release language is included, the authorization arguably does not become effective until the HCPOA becomes effective, thus limiting its utility. In addition, a stand-alone HIPAA authorization is now viewed as the preferred method per the regulations. Without a signed HIPPA authorization, even a spouse or adult child of an incapacitated patient will not be able to receive information on the patient’s condition.

HIPAA authorizations allow individuals to name specific people to whom medical providers may release records. An authorization should, at the very least, allow medical providers to release records to an individual’s agent under a HCPOA. An authorization may also include an agent under a Durable Power of Attorney, a trustee of a trust or an individual’s attorney for the purpose of determining incapacity.           

Conclusion

If you would like to make sure that your family members will be able to access your medical records so that they make informed decisions on your behalf in the event of your incapacity, it is imperative to have both a valid HCPOA and HIPAA authorization. Have an estate planning attorney prepare the documents for you ensure that they are properly drafted and signed.

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