How HIPAA Affects You

HIPAA is an abbreviation for the federal Health Insurance Portability and Accountability Act of 1996, with a new health information privacy law that went into effect on April 14, 2003. According to HIPAA laws, an authorization (“HIPAA form”) is necessary for your health care provider to share information with your loved ones about your health care records, condition and treatment.

Most health care providers have HIPAA forms available upon request, or even through their websites. It is important to remember, however, that these HIPAA forms typically apply only to that specific organization and that they are typically effective for a limited period of time. If you are treated by a different provider, or if your HIPAA form has expired, it will do you no good.

For obvious reasons, it is essential that the person who you designate as your health care agent (or even your financial agent) has access to your medical records when needed in order to make informed decisions on you behalf – or even to obtain a certificate of incapacity, the document that is needed before your power of attorney can be activated.

For additional information about HIPAA, you can visit the Wisconsin Department of Health Services (DHS) “HIPAA NOW” site at http://www.dhs.wisconsin.gov/hipaa. If you don’t have a general HIPAA form in place as part of your estate plan, you should contact your estate planning attorney.

Do I Really Need an Attorney to Set Up an LLC?

There can be many benefits to creating a Limited Liability Company, whether you own an apartment complex, have a consulting business, or are selling cupcakes. With a properly organized and managed LLC, you can protect your personal assets from the debts, obligations, and potential lawsuits of your business. In addition, a Limited Liability Company can provide for continuity in the event an owner dies, becomes incapacitated, or leaves the business.

In Wisconsin, the Department of Financial Institutions offers an online method to quickly file Articles of Organization for a Limited Liability Company. Many assume that, after answering a few questions online and paying a $130 filling fee, you are magically protected from liability!

However, filing Articles of Organization online barely scratches the surface of creating an effective Limited Liability Company. There are many additional legal requirements that must not be overlooked. For example, Wisconsin law provides that you must have an Operating Agreement in place which lays out the general guidelines regarding management of the LLC. Without this important document, your LLC provides you with no protection and the creditors of your business could easily “pierce the corporate veil” and obtain access to your personal assets.

The moral of this story is that, if something looks too good to be true, then it probably is. The cost of hiring an attorney to assist you with establishing your Limited Liability Company can be well worth the legal protections you will obtain in the long run. We often discover the dangers of do-it-yourself estate planning when it’s too late – after a death or incapacity. We often discover the dangers of do-it-yourself business planning when it’s too late – after your business has been sued.

Protect Your Pets with a Pet Trust!

What will happen to Fluffy or Benji upon your death? One would hope that a family member or other loved one would agree to care for your pet and expect nothing in return. After all, anyone who knows you fully appreciates that your pet is not just an item of personal property, but a member of your family… right?

Unfortunately, many pets are abandoned after the death of their owners. According to the ASPCA, about half of all pets that end up in animal shelters are euthanized. Caring for another person’s pet can be a great personal responsibility, not to mention the costs that are involved with food and veterinary care. Depending on the age and life expectancy of your pet, these responsibilities could potentially last for a decade or more!

There is a great solution to this dilemma, and it’s known as a "pet trust". Often, when I mention a pet trust, clients presume this may be a luxury available only to the super-wealthy. Thoughts of Leona Helmsley come to mind, the New York hotel magnate who left $12 million in 2007 to care for Trouble, her beloved Maltese.

The vast majority of modern pet trusts are not quite so extravagant. Generally, a pet trust is set up within your Will or your Living Trust. The most common type of pet trust sets aside a designated dollar amount upon your death. For example, you can set aside $5,000 per cat or dog (or bird, ferret, chinchilla, etc.) that you own at the time of your death. You then direct your personal representative or trustee to find a good home for each pet for the remainder of its natural life. Whoever agrees to care for your pet also receives this cash distribution along with your pet, with the understanding that the money is compensation for veterinary care, food, shelter, love and affection. This arrangement provides a great incentive to make sure that your pet does NOT end up at the humane society.

Our beloved orange cat, Chester, has a trust of his own in the event he outlives us. If you are interested in setting up a pet trust for your furry or feathery family member, you should talk to your estate planning attorney.

The Importance of Health Care Documents

All too often, clients come to my office with nothing more than a simple Will in place and a mistaken belief that this constitutes a sufficient estate plan. While a Will can designate who will serve as the personal representative (also known as the executor) of your estate, how your assets will ultimately be distributed, and your preference for guardians of any minor children, it is essential to understand that a Will is nothing more than a death document. In other words, your Will has no effect until your death.

The harsh reality is that, regardless of age, we are all one car accident away from mental incapacity. While financial issues are certainly important and should be addressed as part of your overall estate plan, many people simply assume that their loved ones would automatically be authorized to make health care decisions for them in the event of mental incapacity. However, this is not an accurate assumption. Without proper planning, your loved ones – even your spouse – would be required to initiate a guardianship proceeding (also known as living probate) in order to obtain the legal authority necessary to make health decisions for you. For a more detailed explanation of Living Probate, see Michelle’s blog from April 28, 2011.

If you wish to avoid the possibility of living probate for health care matters in the event you became mentally incapacitated, you must execute a Power of Attorney for Health Care as part of your estate plan. Through this essential document, YOU can designate who is authorized to make health care decisions for you. While it is possible to designate co-agents for financial decisions, you should only designate one health care agent at a time. Imagine the difficulties doctors might encounter when faced with siblings arguing over decisions such as whether or not life support should be removed! Most people name a primary health care agent, and then at least one backup in case the primary agent is unable to make decisions for some reason.

In addition to a Power of Attorney for Health Care, your estate plan should include a Living Will. Not to be confused with a Last Will or a Living Trust, a Living Will (also known as a Declaration to Physicians) tells your doctor whether or not you would prefer to be kept alive artificially under certain circumstances. Finally, the health care portion of your estate plan should include a HIPAA form authorizing your agent to access your medical records when needed. Without an effective HIPAA form in place, even your spouse may be hard-pressed to obtain your medical records. How can one serve as a health care agent if he or she can’t see your medical records? This could potentially create quite a dilemma.

Terri Schiavo’s case provides a glaring illustration of how important health care documents can be. Terri’s unexpected incapacity at the age of 26, followed by prolonged life support, resulted a legal battle between Terri’s parents and her husband that lasted seven years. If Terri had executed health care documents prior to her accident, her entire battle could have been avoided.