Why a power of attorney is not enough: Do you have this critical document in your estate plan?

If you created your estate plan more than a couple years ago, you may be missing a crucial piece to the puzzle.  In the past, a power of attorney for health care decisions, which in California includes your advance directive (or living will), was sufficient to name another person (your “agent”) to make health care decisions on your behalf.  But the enactment of HIPAA (Health Insurance Portability and Accountability Act), which was designed to limit the access to your medical records – and was focused on insurance companies – actually resulted in limiting the access to your medical records for everyone, including your agent on your health care power of attorney.

Worse, if you don’t have a health care power of attorney, you may think that your “next of kin” – your spouse, your children, or your parents – will have access to your medical information and to be able to make decisions on your behalf.  Unfortunately, with HIPAA and the stricter privacy regulations on doctors and hospitals, this is not often the case.  While you may be looked to for decision-making, if you want to see the medical records or tests results themselves, for example to get a second opinion, you won’t be able to, not even with a power of attorney.

What’s necessary now is called a “HIPAA Authorization,” which I have been using for a couple years now.  It allows the individuals you designate to have access to your medical records and can save your loved ones from hassle and hardship should you be incapacitated.  I use a separate form document, though my older health care powers of attorney included the HIPAA authorization in the body of the power of attorney.

I’ve talked already about the importance of everyone having a power of attorney once they turn 18, but what is also critically important is that you have all the correct documents in your estate plan as well, and a complete estate plan includes a HIPAA authorization.

Getting a divorce? Tax tips

I don’t often write about taxes, but today seems to be tax day, with my last post about the dependency exemption in child support.  It is a common question from my divorcing clients regarding the timing for divorce filing on taxes, and how to file taxes when in the process of divorce.  In addition, many of my clients are interested to know that child support is neither deductible the the payor nor included as income for the recipient.  Unlike spousal support (alimony), which is both deductible and included as income.  Here is an article I read recently that tackles these tax questions and more in a very readable format.

Uncontested divorce: what to do when your spouse won’t participate in the divorce

On occasion I talk to someone who tells me that while they want a divorce, their spouse refuses to talk about it and says they won’t participate or sign anything.  Understandably, the spouse who wants the divorce finds this distressing.  But this is nothing to be stressed about, and here’s why:

First, once you file for divorce, your spouse is likely to at least seek out some kind of advice from someone, whether it’s looking around online, buying a book, talking to a family member, or talking to a lawyer.  When faced with an unknown, most individuals will act in self-preservation.  Since the only advice to give to someone who says they don’t want to participate in their divorce is DON’T DO THAT, those that get advice often find their way to action one way or another.

Second, there is a process for a default divorce, which is what it is called when one party does not file any documents (unlike “uncontested,” which doesn’t really mean anything anymore because in California, and in most states, you can’t “contest” a divorce – though you can contest the terms of the divorce!).  Once you file the Petition and serve it on your spouse, your spouse has 30 days (again, in California.  Your state may vary in its rules) to respond by filing a Response to the Petition.  If that Response is not filed, then the Petitioner spouse can file for default.  This is the process whereby the Petitioner files all of the income, expense, assets and debt information with the court and gets to determine who will get what, including child custody, visitation, child support, spousal support, and asset and debt division.  It still must be equitable (or roughly equal), but what you consider equal and what your spouse considers equal may be radically different concepts.  So long as the proposed Judgment by the Petitioner is not too skewer in one party’s favor, the Judgment gets filed and is an order of the court.

It’s simple in theory but can be complicated to complete, especially since the forms can be a pain to fill out.  But the fact that one spouse can make all the decisions regarding the divorce generally prompts the other spouse to action.  Consider the possibility of child and spousal support being determined without your input or participation at all, or child custody and visitation.  Most spouses tend to act when faced with the actual divorce paperwork, even if they say they don’t want any part of it.

Things they don’t tell you about divorce in California (and everywhere else!)

I have talked a lot about the different aspects of  divorce in California, financial aspects, alternative options, parenting in divorce, and preparation, among other topics, but I’ve never written about all those aspects you don’t know about or hear about until you are in the thick of it.  Here’s a few of the key things they don’t tell you about divorce:

  1. It’s going to take a LOT longer and cost a LOT more than you ever imagined.  No, longer than that….and even longer than that.  Whatever you’ve imagined, add at least 50% more time and money.  And this isn’t just attorney fees money, it’s lost wages money (those pesky court appearances), increased debt money, and new expenses money (new blender, new apartment).
  2. Attorneys – even your attorney – can seem like s/he isn’t on your side.  Sometimes this is good, as when you’re hearing the reality of divorce and your attorney is not just telling you what you want to hear (so you’ll be disappointed later), but sometimes it’s bad, as when your attorney is mean or nasty to you.
  3. Your attorney may not be telling you ways to save money on your divorce.  This can vary from attorney to attorney, and it can range from benign oversight to outright malpractice.  You have to decide what’s going to work for you, but don’t fail to either get a second opinion or learn at least some law and procedure so you know what questions to ask.  The more you fight, the more the lawyers get.
  4. The system is not fair.  It’s not designed to make you feel better or vindicated or right.  It’s flawed, and the people involved are flawed, as people are.  “Making the judge see your side” is not going to get you your way.  What will get you your way is having the facts on your side.
  5. Your children will act out, misbehave, develop illnesses they never had, and otherwise have a really hard time with the divorce.  Instead of blaming your ex-spouse, work with him/her to help your children.  You will save them in the short AND long run.
  6. Your lawyer is not going to be offended if you fire him/her and get another lawyer.  Most lawyers welcome the reduction in caseload and “starting over” with a new lawyer is not hard at all.
  7. Much like #4 above, the legal system is not going to help you at all with the emotional aspects of the divorce.  Get a therapist, as soon as you can.  Get over it, in your own way and your own time, and not with lawyers, courts and hearings.
  8. The more you learn/know, the better off you’ll be, regardless of how complicated or contentious your case is, the amount of lawyers’ fees (if any), and how long the process takes.