Health Privacy Law May Impact Estate Planning
With an ever increasing amount of our own personal medical information being stored electronically, the security and privacy of that data has become a growing concern. In 1996, Congress enacted the Health Insurance Portability Accountability Act of 1996 (HIPAA) to in part, deal with this issue.
The Privacy Rule contained in HIPAA prohibits the disclosure of the Personal Health Information (PHI) of an individual to certain third parties. This prohibition can create an impediment to the operation of certain estate planning documents. For instance, most living trusts provide that if the trustee becomes incapacitated, that a successor trustee will take over the administration of the living trust.
Traditionally, the successor trustee would obtain a written opinion from the acting trustee's physician document the individual's incapacity, and such written opinion would trigger the success trustee's appointment. However, under HIPAA, the physician may be prohibited from revealing such Personal Health Information, thereby not allowing the successor trustee to be able to trigger his or her appointment. This could cause the trust to have no trustee for an extended period of time, with no ability to access or control trust funds.
A solution would be to name a healthcare agent in a valid durable power of attorney for healthcare that has current authority to make healthcare decisions for you, even if you are capable of making decisions yourself. By granting an individual this authority, such individuals would be permitted to access Personal Health Information under HIPAA.
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