Financial professionals who have a grasp of key legal concepts affecting the senior population will be better able to serve their clientele, Cynthia Sharp told a focus session here at the annual meeting of the Million Dollar Round Table.
An attorney who practices estate planning and elder law with Sharp Bratton Attorneys at Law, Haddon Heights and Lawrenceville, N.J. zeroed in on some common mistakes she has seen in the estate planning arena. This was part of an extensive talk on asset protection planning, Medicaid qualification and Medicare.
Sharp did review estate plan basics with which MDRT members are already familiar–the will, the powers of attorney (e.g., the general durable power of attorney or a springing power of attorney), and advance health care directives (living will or health care power of attorney or both).
But she also covered another document with which some may not yet be familiar–the HIPAA release document. She said her firm routinely suggests that clients execute a HIPAA Authorization form as part of the estate planning "package."
Not doing so could result in problems for not just the client but also for those who hold powers for the client, she indicated.
Here is why: Under the Health Insurance Portability and Accountability Act, health care providers are subject to federally imposed sanctions and monetary fines for unauthorized disclosure of private health information, Sharp pointed out. In response, many providers have clamped down on release of medical records and related information to anyone other than the patient, she continued.
But this has "made it more burdensome, and sometimes impossible," for agents holding advance health care directives or durable powers of attorney for health care and trustees under revocable living trusts to carry out their duties, Sharp cautioned.
She illustrated this with a story about a women with Alzheimer's disease.
When the woman could no longer manage her financial affairs, family members sought to have the trustee appointed under her living trust take over management of trust assets, Sharp said.
"However, due to the lack of the proper HIPAA documentation authorizing the release of the woman's protected health information, the family was not able to get her doctors to issue a letter certifying the elderly woman's mental incapacity.
"This was because the doctors felt that providing a certification letter without a HIPAA authorization would violate the provisions under HIPAA. This placed the family members and the successor trustee in a Catch-22. The woman did not have the mental capacity to execute a HIPAA Authorization form authorizing the release of her medical information, but without the form the doctors would not issue letters certifying the woman's incapacity so that the successor trustee could take over the management of her affairs," Sharp said.
"This dilemma forced the family members to petition the probate court to have the successor trustee appointed. The delay and cost of this probate court proceeding could have been avoided easily had an executed HIPAA Authorization form been available to give to the doctors," she continued.
Sharp also reviewed some common mistakes in estate planning documents:
Inadequate power of attorney. She cautioned against relying on using standardized power of attorney forms downloaded from the Internet.
