1. Power of attorney
A power of attorney is a document by which people designate an agent to act on their behalf in financial or legal matters. "This deals with the business side of life, not the medical side," says Sanford J. Mall, a nationally certified elder-law attorney with Mall Malisow & Cooney, in Farmington Hills, Mich. "And it has nothing to do with how much money you have.”
Anyone with assets can benefit from a power of attorney, says Mall. It is usually a good idea for elderly or sick patients to designate a caregiver as an agent so that the caregiver can sign checks and conduct other banking transactions in support of care.
Some powers of attorney are in effect for a limited period of time and can terminate if the person who authorized an agent becomes incapacitated. If you intend to have a power of attorney in order to make financial decisions for someone who has impaired cognitive abilities and for whom you are providing care, make sure the person drafts what’s known as a durable power of attorney. This allows you to remain the agent even if the person is incapacitated.
Also known as a medical power of attorney, a health-care proxy enables you to make health-care decisions for someone else. Since there's no telling when an accident can strike, Mall advises everyone to have a health-care proxy, regardless of age. For example, Mall's daughter was in a serious car accident the day after her 18th birthday. When Mall and his wife arrived at the hospital, the staff refused to talk to them about their daughter's condition. "The birthday present for every 18-year-old should be a medical power of attorney," Mall says.
3. HIPAA authorization
The Health Information Portability and Accountability Act (HIPAA) keeps your health information and records private. So unless you authorize in writing someone else to receive that information, your doctors aren't obligated to share any details about your health. "In some states, a health-care proxy does not go into effect unless the patient is deemed incompetent or incapable of expressing his own wishes," says Timothy Wyman, a financial planner and lawyer with the Center for Financial Planning, in Southfield, Mich. "But there are instances where a person might want to have someone else talk to their doctor for them." Remember to give copies of the HIPAA authorization to health-care providers, and make sure you have several more on hand in case you must furnish them.