Documents Needed if I Am Incapacitated
Questions I often get (especially since COVID) include “What happens if, for instance, I end up in the hospital and aren’t able to make decisions for myself? Who pays my bills? Who makes medical decisions for me if I’m unable to make them for myself?”
When people think about Estate Planning, they generally think only about a Last Will and Testament.
Although a Will (or a Trust) is the foundational part of an estate plan, we must remember that it only take effect after someone dies.
If someone is incapacitated (like with the hospital example above) there are documents that will be needed to more easily carry out your wishes and manage your assets in the event you are temporarily or permanently disabled.
It’s a lot easier to plan ahead for these situations rather than have to deal with them after they’ve already occurred.
The following is a list of the essential Texas estate planning ancillary documents I’d recommend every adult in Texas needs to have in place just in case you become incapacitated:
(1) Statutory Durable Power of Attorney:
This document authorizes you to appoint a person (aka your “agent”) to handle a variety of financial and legal transactions on your behalf. The authority conferred on the agent begins when you sign the power of attorney, and continues even if you become mentally or physically disabled or incapacitated.
The person that you appoint to be your agent essentially steps into your shoes and can conduct business on your behalf, pay your bills, and handle your day-to-day finances until you’re able to handle them again.
You can always amend or revoke this power of attorney so you have options on who your agent will be, or whether or not you decide to terminate it altogether.
(2) Medical Power of Attorney:
This document gives your agent the power to make important medical decisions for you in the event you become unconscious or mentally incapable of making those decisions for yourself.
It is effective indefinitely unless it contains a specific termination date, it is revoked, or the principal becomes competent.
A medical power of attorney authorizes your agent to act on your behalf only after your attending physician certifies that you are incapacitated and are unable to make medical decisions for yourself.
(3) "HIPAA Authorization"/Authorization to Release Medical Information:
A HIPAA Authorization goes hand-in-hand with the Medical Power of Attorney. If you’re incapacitated and currently in a hospital but have been treated in the past by another medical provider (such as your family doctor), then we want to get the hospital all of pertinent medical records so they know your medical history.
This document allows your appointed agent to do that for you so your medical records can be quickly released from your doctor’s office to the hospital.
The Standards for Privacy of Individual Identifiable Health Information, part of the Health Insurance Portability and Accountability Act (“HIPAA”), requires that your health care providers (i.e., doctors, dentists and hospitals, among others) (the “Covered Entities”), must obtain a written authorization from you in order to disclose your health information to any other party. This section of HIPAA is commonly called the “Privacy Rule.”
Having this Authorization in place will help quicken the process of navigating the HIPAA privacy laws, especially when time is of the essence and we need to get medical records from one provider to another.
(4) Directive to Physicians (aka “Living Will”):
A Directive to Physicians, also sometimes referred to as a “Living Will,” allows you to instruct your physicians to administer, withdraw or withhold artificial, life-sustaining treatment in the event you are diagnosed with a terminal or irreversible condition and are unable to make your own health care decisions.
Essentially, this document tells our medical providers what we want to happen to us if we’re on life support.
A Directive to Physicians can be revoked at any time, even in the final stages of a terminal illness. You can revoke your Directive orally or in writing. If you revoke your Directive, you must notify your physician of your decision, which your physician will then note in your medical records.
In summary, when we’re thinking about the concept of 'Estate Planning' we want to plan for two points in our lives:
(1) When we die, and
(2) If we were to become incapacitated.
Remember, our Will only triggers after death.
If we’re incapacitated it’ll require these other documents to have been executed in order for our loved ones to act on our behalf without undue delay or additional steps being taken.
Even though they’re not talked about as much, these other "ancillary" documents are important and can be extremely beneficial to have in place in case something unexpected were to ever happen to us.