woman-with-advisor-300The Power of Attorney is one of the Advance Directives, along with the Health Care Proxy and the Living Will.1 It is the document whereby one person, called the principal, appoints another person, called the agent, to act on the principal's behalf according to the authority it grants.

This authority often includes the ability to do banking, appear in lawsuits, and engage in other business and transactional matters. In the elder law setting, it often includes the ability to transfer assets into a trust, to apply for government benefits, and to request and access medical records.

Powers of Attorney come in the following varieties:

• General - grants broad authority across many different categories, even to the extent of allowing the agent to do anything the principal could do;

• Special - narrow and often limited to a single transaction or activity, like only the sale of a specific asset, or only banking on a specific account;

• Durable - continues to remain in effect even after the principal loses capacity, like after a stroke; • Springing - becomes effective (i.e., it "springs" into being) upon the happening of a specific event, particularly the disability or loss of capacity of the principal.

More often than not, the kind favored for elder law and estate planning purposes is the general durable Power of Attorney. It continues in effect after incapacity so that steps can be taken even after age, accident, or deteriorating health. It is broad so that it can be used to take care of all kinds of matters that could come up, including post-incapacity planning and putting care in place.

Some people, however, prefer a springing Power of Attorney because they dislike the idea that a regular one grants authority to the agent right away--instead, they prefer to have the agent acquire the granted powers only if and when the principal can no longer act.

A common provision in the elder law or estate planning setting addresses the Health Insurance Portability and Accountability Act ("HIPAA").2 HIPAA protects health care privacy by limiting disclosure of health care information and records to a patient's designated "personal representative." Such a provision will expressly give the authority to access medical records.

The springing Power of Attorney, therefore, presents a potential Catch-22: a seemingly unsolvable circular dilemma that could arise if care is not taken. This is because, by its nature, it does not become effective unless and until the principal becomes incapacitated, and proving this may very well require access to his medical records--which are not accessible until the agent acquires the ability to get the medical records - etc., etc., round and round in an endless Catch-22 loop.

Care must be exercised to avoid having the agent end up in this Catch-22. As a first step, both the Power of Attorney and the Health Care Proxy should contain language that explains that the agent is also the personal representative for the purposes of health care disclosures under HIPAA as well as the circumstances under which access would be allowed. More importantly, it would be prudent to also sign separate HIPAA release forms that explain what medical information can be disclosed, who can make the disclosure, and to whom the disclosure can be made.

An attorney well versed in both elder law and estate planning can help you decide what Advance Directives are right for you, and to make sure they mesh with the requirements of HIPAA.

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1. Many also consider the Last Will and Testament to be one of the Advance Directives as well.

2. The Health Insurance Portability and Accountability Act of 1996 ("HIPAA")(Pub.L. 104-191, 110 Stat. 1936, enacted August 21, 1996), and its so-called Privacy Rule, established federal standards for safeguarding the privacy of an individual's identifiable health information. It generally prohibits health care providers such as health plans and clearinghouses, health care practitioners, hospitals, nursing facilities and clinics from using or disclosing "protected health information" without written authorization from the patient.

Our office concentrates on Elder Law, Medicaid Planning, Trusts and Estates, Guardianship, Advance Directives, and Special Needs Planning. Contact us to discuss your particular situation: Tel. 718-276-0010 or This email address is being protected from spambots. You need JavaScript enabled to view it.. Visit our website at http://www.jimsarlis.com for more information.

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