Estate Planning Documents and HIPAA Waivers

As a part of many estate planning documents, individuals are called on to get medical information about another. The main example is a health care directive which states who is to make health care decisions for you in case you're incapacitated. That person will need to have full access to your medical records in order to make an informed decision. Another document is a trust that states that a certain action will be triggered upon disability as decided by a medical doctor. In order for the trustee to know if the individual is disabled, they will need to have access to medical records and information from the individual's doctor. However, HIPAA can impede these individuals from getting access.

HIPAA, or Health Insurance Portability and Accountability Act of 1996, is a federal law that was enacted to standardize data gathering and sharing in the medical field. A part of this act protects an individuals' health care information from being disclosed. Individuals acting in the capacity as a "personal representative", such as under a health care directive, are specifically allowed to have access to medical information. However, there have been many anecdotal reports of medical providers refusing to release information to the personal representative, citing HIPAA concerns, even in spite of what the federal regulations state. Additionally, there is no exception for trustees, attempting to determine the status of an individual for purposes of the trust.

These problems can be avoided through a HIPAA waiver, signed by the individual. It is a single page document that need not be made a part of the trust or directive, but can be provided to a trustee or personal representative to prevent HIPAA issues.

If you are contemplating a trust or health care directive or already have one in place, which doesn't address HIPAA, contact a licensed attorney.

Will the Nursing Home Take My Farm? The role of medical assitance planning.

As we get older, the possibility of entering a nursing home, and the concern for how to pay for it, becomes an increased worry for many people. If one requires medical assistance from the state to pay for nursing home care, the state can recuperate what they can by placing liens on certain assets held by the individual, including homestead and farm property. Accordingly, many people worry about what the government can or cannot take and how they can go about it.


First, the state government evaluates whether someone is eligible for medical assistance both by looking at their monthly income and the amount of assets they have. If the state determines they are eligible, the state will pay for the nursing home care. If individuals have made prior gifts during what's called the look back period, the state will "look back" and impute the income to the individual. The state won't go to the recipients of the gifts to recuperate the costs, they just may not find the individual eligible for assistance. Additionally, in many instances, if the individual is otherwise eligible but owns real property, the state may find that person eligible and give assistance, but will place a lien on the property to recuperate the money spent on the care.


Planning ahead is the key for medicare assistance planning. Working with both a licensed attorney in the state that you plan to receive care in and a financial advisor can help you prevent a situation where you need assistance, but either are found ineligible or have your real property incur a state medical lien.

What happens if I don't have a will?

I'm often approached by people who say they want a will so their property doesn't go to the government. While there's many reasons to have a will (probably a smoother probate and smoother family relations is just one of many reasons), the risk of having the government "take" your stuff merely because you don't have a will is very unusual. So, what happens when there is no will?

When someone dies without a will, it's stated that the individual died "intestate". All states, including Minnesota, have intestacy laws which give a specific order as to who gets how much of the estate. In general terms, a spouse gets first. If there's no spouse, then the children get and so forth. If the decedent died without a spouse or descendants, the parents get first and if no parents, the siblings get and so forth. If there is no spouse or descendants, parents or siblings, then the grandparents get or aunts and uncles if no grandparents and so forth. The main point is that the state of Minnesota is the last resort. If there are no relatives around to claim the estate, only then does the estate go, or escheat, to Minnesota.

There are many reasons to have a will, but probably one of the most minor reasons is to prevent Minnesota from getting your stuff.

What do you mean by an estate plan?

An estate plan is an umbrella term that refers to a plan as to what happens when someone dies or is incapacitated. Issues to consider are where your stuff will go, who will take care of your kids, who will make my decisions if you can't make them, how to make the probate process quicker and less expensive, continuation of a family farm or business, and what the effect of taxes and state liens will be.

There can be many pieces of an estate plan depending on the needs of an individual. Something that just about everyone should have is a will. Without a will, the state will apply the fallback provisions in state law to determine who gets your property, which may or may not follow your intent. Additionally, dying without a will which can specifically call for an expedient probate process, can cause a longer, more expensive probate process.

Also, everyone should have a health care directive, which states who makes the health care decisions for you in the event of your incapacitation and gives direction as to your wishes. This health care directive needs to include a HIPAA waiver to allow the hospital to release protected medical information to this person.

In the same vein, everyone should consider a power of attorney who can deal with your financial affairs in case of your incapacitation. However, once created, that person has as much right to your finances as you do and you should only execute a power of attorney if you have a trusted individual in place.

Besides these documents, other documents can be executed, trusts established, and business entities created which address your specific needs. This is why it is so important to contact a licensed attorney to look at all of your circumstances to craft an estate plan to fit your needs.

Is a trust a good idea for me?

A lot of people wonder if they need a trust or if a trust will be a "cure-all" to all issues that could come up after they die. This seemingly simple question is really only properly addressed through determining an individual's goals for their overall estate plan. A trust may play a role in accomplishing these goals.


First, a definition, a trust is a type of ownership where the control of the property and the benefits of ownership are split. A trustee has control of the property and the beneficiary has the benefits of the property. Because pieces of the ownership are split, trusts end up being a useful vehicle to accomplish many types of estate planning goals. These goals include:

1. avoiding or eliminating estate tax
2. avoiding probate
3. becoming eligible for medical assistance
4. farm or family cabin continuation
5. providing for young children or those with special needs
6. allowing another to use your assets to provide for your needs in case of incapacitation
7. using your assets to accomplish a charitable purpose.

If you are interested in using a trust to accomplish some of these goals, speak with a licensed attorney who can discuss your estate planning goals and various legal tools, including trusts, that may help.

What's a TODD?

The Minnesota Legislature recently enacted legislation allowing the use of "Transfer on Death Deeds", or TODD. The Minnesota Legislature enacted Minnesota Statute 507.071, to be effective August 2008, which establishes the nature and use of TODDs. So what is a TODD and what can it do for you?

A Transfer on Death Deed works a little bit like termination on death accounts that many people have at banks.

With a Transfer on Death Deed, prior to the their death a grantor/owner creates a transfer on death deed which lists the real property that will be disposed of on death. The deed is filed with the county where the real property is located. At death, the property automatically belongs to the recipient listed on the deed.... without the need for probate. It's a lot like a life estate, except that a TODD can be revoked by the grantor/owner for any reason. The grantor/owner has the benefit of use of the property for life, transferring the property upon death without probate, and still retains control in determining who gets the property. A TODD works great in situations where it is advisable for a piece of real property to stay out of probate proceedings.

However, a Transfer on Death Deed isn't the magic wand that some people want it to be. Property transferred by a TODD will still likely be used to determine a taxable estate because the owner retains the power to revoke the deed. Additionally, property transferred by a TODD is still subject to any mortgages, liens or judgments that the property was subject to during the life of the owner/grantor. Therefore, a Transfer on Death Deed will not reduce estate tax or prevent recovery of government benefits.

If you think that a TODD may be right for you, contact a licensed Minnesota attorney.

What is Ancillary Probate?

In an increasingly mobile society, individuals are owing property in more than one state. Whether it be the lake cabin in Wisconsin, the condo in Florida or an interest in the family farm in North Dakota, owning such property may complicate matters for those you leave behind.

When real property located in another state is "disposed" of (fancy lawyer language for "given") in a will, a separate probate proceeding in that state will have to be commenced. This type of probate is typically called "ancillary probate" (more fancy lawyer language for additional probate in another state that is secondary to the main probate occurring in the state of the decedent's death or domicile). This will require the payment of additional court fees and hiring of local counsel to appear on behalf of the estate. All of this will cost your estate money.

Additionally, ancillary probate might not be able to be started until certain steps are completed in the primary probate occurring in the home state. Ancillary probate, once begun, will also be subject to the calendar of that court, which may cause further delay in wrapping up the probate of the estate.

Another issue is that some states require that personal representatives meet certain conditions, such as residency, that your home state doesn't require. That could mean that the person you've given the power to deal with your estate won't make the cut in another state. In such a case, the court in the ancillary state may appoint another person or a professional to administer the estate, which may cost your estate even more money.

There are ways to avoid ancillary probate which require careful planning in disposing of the property outside of the will. If you have property in another state, let your estate planner know about it. Your estate planner can work with another attorney in the state where the property is located to make sure your estate is dealt with as efficiently as possible, both in time and money.