A crisis is often a test of our strengths. It can also shine a light on issues that we don’t think about on a daily basis, such as emergency or estate planning.
The COVID-19 pandemic is an example. This sudden public health crisis has created serious health and economic challenges for households. It also highlights the importance of family communications and having legal documents in place, such as a health-care proxy and a power of attorney.
Health-care proxy
Health-care proxies and powers of attorney are not limited to caring for seniors. Individuals may fall ill or have an emergency at any age. Someone who is typically healthy may become ill unexpectedly. A health-care proxy allows another family member or close friend to help make decisions for someone who is incapacitated. The document also allows doctors to share information. Under the federal HIPAA (Health Insurance Portability and Accountability Act), providers may be unable to share information without a designated proxy.
A living will, or advanced directive, is often paired with the health-care proxy, and signed at the same time, to help guide the proxy. This document allows the individual to discuss his or her wishes about the use of various types of medical treatments to extend life. The advanced directive forms vary by state and could require different information.
HIPAA medical release
When patients visit a doctor or hospital, they are often asked to sign a HIPAA form, which authorizes the sharing of medical information with a designated person. Typically these forms are signed at the treating facility. However, documents prepared in advance should include language that will allow the designated agent to receive medical information in compliance with HIPAA regulations.
Durable power of attorney
The durable power of attorney authorizes an agent to manage finances and sign legal documents on behalf of the patient. The power of attorney will make it possible for the agent to sign documents, access bank accounts, and manage accounts.
Contact an advisor
An opportune time to prepare these documents is when creating an estate plan with a will. However, they can be prepared or updated anytime. If you already have signed documents, it’s important to review them and make necessary updates if you have moved, or if the designated proxies are aging or not available.
Since the pandemic began to impact life in the United States, advisors are reporting an increase in requests to update or prepare wills, health-care proxies, and powers of attorney. There may be additional planning and logistics required during these times of social distancing, however, to get documents signed and witnessed. A professional advisor can arrange for ways to meet the legal requirements at an appropriate distance, combined with technology such as video conferencing and email.
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For informational purposes only. Not an investment recommendation.
This information is not meant as tax or legal advice. Please consult with the appropriate tax or legal professional regarding your particular circumstances before making any investment decisions. Putnam does not provide tax or legal advice.
