You've drafted all the important legal documents.

You have a health care power of attorney or health-care surrogate, giving somebody power to make health care decisions on your behalf. You have a durable power of attorney, providing for somebody to handle your financial affairs if you become incompetent. You might even have a trust agreement, permitting someone to hold title to property for the benefit of another.

Yet you and your family still could face trouble. Reason: Privacy rules under the Health Insurance Portability and Accountability Act that largely took effect on April 14, 2003.

That federal law restricts health care providers -- including doctors, pharmacists, hospitals and nursing homes -- from releasing information about you. Violators may be subject to a fine ranging from at least $100 through $100,000 and up to five years in prison. The rule also restricts information that can be released about you by all health insurers.

Could those designated in legal documents to handle your health and financial affairs when you can't handle them be barred from obtaining medical information they need to implement those documents? Perhaps, says Joseph Karp, Palm Beach Gardens, Fla., elder law attorney, unless you clearly specify otherwise -- either within all these legal documents or in a separate document. .....

"If [the document] doesn't address HIPAA, under federal law, there can be a question whether a medical provider can release any information," Karp said. This lack of information could force your family into a costly court proceeding seeking a guardianship or conservatorship -- exactly what legal documents often aim to avoid.

Here, Karp says, are examples of what could happen if your legal documents are not carefully updated to reflect the recent privacy laws.

A legal document may take effect only if you cannot act, in the opinion of two doctors, or, say, upon proof of disability. But how are the people you've designated to take over supposed to know when this occurs if health care personnel can't tell them? Be sure that you insert HIPAA-specific language in your documents -- or in a separate document -- clearly granting this authority, Karp says.

A spouse may be designated as an agent to handle affairs, followed by children. However, as both spouses age, the child may start taking over. A child could face road blocks getting medical information necessary to handle your insurance claims if your spouse is still alive. Consider, he suggests, providing "HIPAA release" authority to children as well as any others who might ultimately be responsible for either your care or money. Make sure, Karp adds, that all successor trustees or powers of attorney clearly have authority to get medical information about you.

"All your money could be frozen in space because nobody has the right to get the information," Karp warned. Not all doctors are concerned. But others, according to Karp, have gone so far as to stop leaving doctor appointment confirmations on patient answering machines!

So far, no fines have been levied under the new privacy rule, reports the reg's sole enforcement agency, the U.S. Department of Health and Human Services Office of Civil Rights. The privacy rule actually "requires that doctors share information with 'personal representatives,' " said Office of Civil Rights Director Richard M. Campanelli. It also "permits them to make disclosures to 'others' involved in the [health] care of the individual."

This rule does not apply, Campanelli concedes, to a real estate power of attorney, for example. A question of disability or incapacity in a legal document, he indicates, could boil down to state law -- under which those legal documents are devised. If you want anybody other than your personal reps to get medical information about you, Campanelli suggested, "It's helpful for patients to inform doctors what their purposes are."

The law does not require notification in writing, but given how busy doctors are, isn't written notice advised? "People," Campanelli said, "have to make that choice."