The HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 (“HIPAA”) although enacted in August of 1996 only had certain related regulations became effective last year and these regulations have had far reaching influence on certain standard estate planning tools in ways perhaps not envisioned by its drafters. It primarily deals with the portability of insurance but also gave the Department of Health and Human Services (“HHS”) authority to enact regulations to prevent unlawful dissemination and disclosure of personal health care information.

It is in those regulations that became effectively recently that rules have been created that require rethinking and redrafting of many Trusts and Estate Plans, including Durable Powers of Attorney. See chapter six of our web article on Estate Planning.


Basic Law of HIPAA Regulations:

The HIPAA privacy regulations apply to every physician, dentist, nurse, pharmacist and health care provider in the United States. The regulations prohibit those health care providers from disclosing “individually identifiable health information” without the prior consent of the individual.

Said information includes all data that relates to

  1. the individual’s past, present or future physical or mental health or condition,
  2. the provision of health care to the individual, and
  3. the past, present or future payment for the provision of health care to the individual.

Entities subject to the HIPAA regulations may not use or disclose the protected health information except for purposes of carrying out treatment, payment for services or health care operations, or as the individual authorizes in writing.

Further, the HIPAA regulations stress that health care providers must make reasonable efforts to limit the disclosure of protected health information to the minimum information necessary to accomplish the intended purpose of the use, disclosure or request.


Penalties for Violation of the Regulations:

Violation of these regulations can lead to significant fines and even imprisonment thus health care providers are taking these restrictions quite seriously.


Authorization for Release of Information:

The HIPAA regulations do allow individuals to authorize the release of their medical information to third parties. Under the regulations, an authorization for the release or disclosure of an individuals’ protected medical information must:

1. be a written document signed and dated by the individual

2. identify the protected health information to be used or disclosed,

3. identify the persons to whom the information may be disclosed

4. contain an expiration date

5. identify the individuals’ right to revoke the authorizations and

6. acknowledge that the information may be redisclosed by the recipient.


Additionally, and of great import for estate planning purposes, the regulations allow individuals to designate a “personal representative” to whom the information may be disclosed or who may request said information be disclosed to a third person. In short, the personal representative has the same power and ability as the individual does to request, disclose or authorize the release of any of the protected health information.


Estate Planning Ramifications:

The two areas the new regulations most effect estate planning involve powers of attorney and trusts. A power of attorney is a written document by which the principal designates an agent or attorney in fact to make financial or health care decisions for the principal and are discussed in more detail in our article on Estate Planning.



There are two types of powers of attorney at issue: ones that relate to property and ones that relate to medical decisions. Durable Powers of Attorney survive the incompetency of the principal and are useful to provide that someone appointed by the now incompetent principal can make either health or property decisions for the principal while he or she remains incompetent.

Health care powers of attorney generally authorize the agent to contract for health care services, have access to medical records and consent to their disclosure. However, medical providers may be unwilling to share medical information with an agent in the absence of a medical release or designation of the health care agent as the personal representative that specifically complies with HIPAA regulations. To ensure that a health care agent can readily access medical records and can authorize their disclosure to others, health care powers of attorney should specifically incorporate the HIPAA release provisions and identify the agent as the “personal representative” for purposes of HIPAA regulations. Legal advice should be sought to ensure this compliance. Some medical durable powers of attorney already meet the requirements of HIPAA and may not have to be altered.

Property durable powers of attorney can be effected because when they can become effective often depends upon a physician determining that the mental condition of the principal is no longer competent-precisely the information that the HIPAA prohibits being released. As one client commented, at the moment it is most crucial to obtain the information, it is barred from release by the physician under HIPAA. As with trust instruments described below, the solution is to include the appropriate HIPAA language either in the instrument itself or in a separate document.



As with the durable power of attorney for assets, successor trustees seeking to know if a trustee (who may also be the settlor) is still competent may not be able to obtain access to the medical information critical for them to know if they must assume the duties of trustees. The successor trustee must be able to prove incapacity before he or she can act but may not be able to do so unless the prior trustee has authorized the release of his or her medical information to the successor trustee under those circumstances. Again, the solution is an alteration in the Trust itself wording or in a separate document executed by the settlor (and the trustees) to allow the successor trustee access to such critical medical information.

Our recommended form authorization can be found on the Retainer Page Forms page. Alternatively, those with existing wills, trusts and/or durable powers of attorney may want to contact legal counsel to have those documents amended to conform to the new requirements.



As with so many changes in the law, a policy or plan that has beneficial intent results in requiring additional and often expensive alteration in existing structures and documents that were unintended. While this particular alteration is not expensive to implement, the effect on family and assets for those not taking the trouble could be not only expensive but deeply harmful to family dynamics. The reader is advised to take steps to adjust his or her own estate plan to conform to the new requirements for, quite simply, only the reader has the power to prepare for this eventuality regarding his or her own estate plan.