One of the purposes of a living trust is to make sure you are taken care of in the event you become incapacitated.
But Samuel B. Ledwitz, a longtime estate planning attorney with a specialty in estate planning, trust and probate law, said the problem with having usable documents — including an advanced healthcare directive — is that people rarely take the time to update them to make sure they will work the way they are designed to.
“When is the best time to put a seat belt on when you drive a car? Before you’re driving, during the accident, or after the accident?” said Ledwitz, who is the founding partner of Bezaire, Ledwitz and Associates. “And by that I mean you want your healthcare directive to actually work. Let’s say your document is from 30 years ago, there’s a good chance this document will not work as you expect in today’s modern world.”
One of the reasons it might not work, Ledwitz said, is because the laws have changed over time.
“If your advanced healthcare directive (previously known as a durable power of attorney for health care or a living will) is created prior to 1992, it expired after seven years,” he said. “There’s actually people out there with documents that were drafted in the 1980s and they won’t work today. And in California in 1999 we went from calling it a durable power of attorney for healthcare to calling it an advanced healthcare directive.”
Another law that was passed is the Health Insurance Portability and Accountability Act (known as HIPAA), Ledwitz said, adding over time this changed what documents people needed in the event of incapacitation.
“You will also need a HIPAA waiver,” he said. “HIPAA was passed by Congress in 1996, but we didn’t see it making its way into estate planning until 2004. So, if you got your documents done before 2004, you might not even have the second part of the much-needed healthcare documents.”
Ledwitz added HIPAA plays a big role on who can help you in the event of a medical problem and regulates what the doctor can and cannot say.
“What HIPAA does is it allows the doctor to speak freely to your loved ones about your complete medical condition,” he said. “If you don’t have the second part, known as the HIPAA waiver, the doctor can’t talk to you.”
He also said doctors are not rushing out to break HIPAA regulations as the punishments are rather draconian.
“The penalties for doctors breaking HIPAA are up to a $250,000 fine for each offense and up to five years in prison,” he said. “We don’t know of any doctors actually going to jail for this, but you can be sure the hospital administrator is telling the doctor not to talk until it is definitely OK. And, unless you show them the proper documents nothing is going to happen.”
Ledwitz added: “Not only have the laws changed over the years, but your own personal situation has probably changed.”
Children have grown up, maybe moved away, and someone who was important 30 years might have passed on. And that’s why these documents need to be up to date.
“You may have had kids who were 8 years old when you initially drafted these documents and now, they’re 25,” he said. “Maybe you want to now change the decision making in the event you can’t. The laws have changed. People in your life could have changed. People could have passed away or moved away. These documents need to be reflective of what is the current situation in your life. And if you’re having a medical emergency, since these things are time sensitive, you want to have someone named who is geographically desirable. Maybe they were 30 years ago, but they aren’t now. That’s why you need to look at these things.”
In addition, some people list multiple people to work together in their directive. This approach can create more problems that it helps.
Ledwitz points out, “The nice people that once got along together have now had a falling out and no longer speak to each other. Could you imagine two people that don’t get along now arguing over you in your hospital bed all the while they remind each other why they don’t get along? Are any important medical decisions being made while they fight?
“And in this situation, you don’t have time. What’s simpler to do is just update your documents more often so precious time doesn’t need to be wasted. You need to make it easy to implement.”
And how often should someone update their documents? Ledwitz said around every three or so years to make sure the law doesn’t change and the people in your life don’t change.
Persons who would like to discuss any aspect of a proper estate plan can call the Law Firm of Bezaire, Ledwitz and Associates at (626) 398-0100 or log onto www.SmartEstatePlans.com.