Four Estate Planning Lifetime Documents Every Person Needs


There are four estate planning documents that every person should have established in their lifetime:

Durable General Power of Attorney

The Durable General Power of Attorney is used for you (referred to as the "principal") to appoint a person to act on your behalf (called an "agent") for financial or tax matters. The agent must act only on your behalf and must account to you for all of his actions. If you want your agent to make gifts of your property the gifting authority must be specifically granted in the power of attorney.

Gifting authority should be carefully considered and limited to a class of people such as a spouse or children and limited in amount. Many people limit gifting authority to the annual exclusion amount, which is currently $13,000 per year. A durable power of attorney means that if the principal becomes incapacitate the agent can still act.

A durable power of attorney may either be currently effective or springing. A currently effective power is effective upon signing, and the agent may act on behalf of the principal even if the principal is not incapacitated.

A springing durable power of attorney is only effective during the periods the principal is incapacitated and generally must be triggered by a letter from the principal's physician.

A currently effective power of attorney is much easier to use but is also somewhat riskier because the agent can act immediately. The springing power of attorney is much harder to use because the letters must be obtained from physicians, but it offers a greater level of protection against fraud.

General Powers of attorneys do not expire, contrary to common misunderstanding of bank officers and title officers. Colorado law sets forth a form of an affidavit the agent can give stating that the power is in full force.

Without a General Power of Attorney, it is possible that a proceeding may need to be commenced in the Probate Court for the appointment of a Conservator. These proceedings can be quite expensive when compared with the cost of obtaining a General Power of Attorney. Care should always be taken to appoint an agent that is honest and trustworthy.

The Durable Medical Power of Attorney

The Durable Medical Power of Attorney is used to delegate medical decision-making to an agent. Under Colorado law, a medical power of attorney is effective only during periods the principal lacks the ability to provide informed consent to or refusal of medical treatment.

A principal can also indicate in the medical power of attorney whether they want to be an organ or tissue donor.

Many attorneys combine the Durable General Power of Attorney with the Durable Medical Power of Attorney. Without a Durable Medical Power of Attorney, there is a provision in Colorado law to allow the closest family members to make medical decisions. If there is a dispute, however, there may be a need to commence a guardianship proceeding in the Probate Court.

The Living Will

Colorado law officially refers to the Living Will document as a Declaration as to Medical or Surgical Treatment. It is essentially an advance expression of your wishes as to what continuing medical treatment you want to receive if you have an injury, disease or illness that is not curable or reversible and is a terminal condition and you are unable to communicate your wishes to medical personnel due to coma, unconsciousness or incapacity for a specified number of days.

To cease all life sustaining treatment, the attending physician and one other physician must certify the incurable and terminal condition and confirm that the requisite number of days you have been unable to communicate have passed.

Colorado law also allows you to separately express whether you would want to be actinically fed after the medical treatment has been discontinued.

The Living Will is only applicable in these narrow and unfortunate circumstances. If there is a conflict between the Durable Medical Power of Attorney and the Living Will, it is a good idea to specify which document will take precedence, which should normally be the Durable Medical Power of Attorney.

HIPAA Authorization

The Health Insurance Portability and Accountability Act (HIPAA) was enacted by the U.S. Congress in 1996 and was intended to protect health insurance coverage for workers and their families when they change or lose their jobs.

HIPAA has Privacy Rules that took effect on April 14, 2003 and established regulations for the use and disclosure of any information about health status, provision of health care or payment for health care that can be linked to an individual.

An HIPAA Authorization is a relatively new document and follows the federal regulations under HIPAA for discloser of medical information. Without an HIPAA Authorization, medical providers may refuse to provide information about your medical health to you agent.

For more information on Living Wills, the Durable Medical Power of Attorney, the Durable General Power of Attorney or the HIPAA Authorization, please contact the experienced estate planning lawyer Steven R. Warden today. He has been assisting Denver clients with their estate planning and probate needs for nearly thirty years.