A Special Message to All Our Valued Clients and Web Visitors:

Based on an estate plan prepared under laws prior to HIPAA, if you become unable to handle your affairs due to age or diminished capacity, the trust documents and the powers of attorney protect you to ensure that you affairs are handled in the way you want. This is because the successor trustee steps into your shoes and makes your decisions for you.

Under the new HIPAA law, if those documents require a physician’s determination of your inability to act or to handle your affairs, without a HIPAA compliant written authorization, such a determination cannot be obtained. This means a Court Order will be required to MAKE the physician release the information before your successor trustee can make medical and financial decisions on your behalf until you recover. Imagine the possible problems...

If you or your loved one have a medical condition that renders that person incapable of managing their financial affairs, your trust provides that the next listed successor trustee shall become the currently acting trustee.

The next listed successor trustee contacts your physician to obtain a written statement of your medical condition to provide to financial institutions to show that under the terms of the trust, the next listed successor trustee should now be the currently acting trustee. Unfortunately, the physician states that without a written authorization from you, the physician cannot provide such a statement. The result would be that any assets held in the trust could not be touched until you passed away. How would your expenses be paid and assets be protected during this time? This includes insurance, Medicaid and Medicare claims.

Worse, imagine where the successor is not a spouse, this could be a child, a friend, or even a life-partner. The physician may refuse to provide the statement and thereby prevent the successor from making the necessary life saving medical decision.

"Doesn’t My Advance Health Care Directive Protect Me?"

On first glance, the California Health Care Power of Attorney laws seems to provide the health care agent the ability to obtain the necessary information to determine if they are in fact now authorized to make health care decisions for the principal. Unfortunately, the legal community is currently split on whether or not the new HIPAA law preempts the California Health care Power of Attorney laws. In fear of the severe penalties, many physicians may be reluctant to provide any information without a properly written HIPAA release, even if you have an Advance Health Care Directive (or Health care Power of Attorney).

To confront these problems and the implementation of these new privacy laws, we have some updates to the estate planning documents previously prepared for you. These will include the proper written releases to avoid the pitfalls discussed above, as well as a requirement that any successor trustee or attorney-in-fact (under a power of attorney) must execute similar releases so that the next person in line can step in; just in case the first person can no longer perform his or her duties and responsibilities concerning your affairs.

We will gladly be making the necessary HIPAA updates for a nominal fee for all of our current clients.

If, at that time, you desire to amend or update other portions or your estate planning documents (i.e., changing designation of successor trustee, or changing distribution of assets), we will be happy to do so.

If you think you may want to make other changes, then please be certain to let us know before your appointment so we can provide you the necessary time to completely explain your wishes. After all, our ultimate goal is to make sure your estate plan properly expresses your desires.

Please feel free to contact our office, at your earliest convenience, to make arrangements to have these and any other updates prepared. (626) 578 - 0708. We will be glad to answer any additional questions you may have concerning these updates at the meeting.

Thank you for your time and consideration. We hope to see you soon!

SCHOFIELD, GROSSMAN & LINDEN

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