Old Enough to Vote? Old Enough to do Estate Planning
If you are a young adult, you need estate planning. Yes, I am talking to you, high school graduate. You see, when you turned eighteen, you became an adult. And as an adult, you are now responsible for making your own decisions. So, you need an estate plan. You need this plan to make sure your wishes are carried out if you are unable to make those decisions yourself.
And, if you are a parent of a young adult, you need to talk to your child. You need to explain to him or her why young adult estate planning is so important. Not sure what estate planning documents your child needs? Need some pointers to start this conversation? No worries, we have you covered as well!
Coming of Age and Powers of Attorney
When your child turns 18 (in most states), it might be hard to imagine that little child who once needed you for everything has now become – overnight – an adult. Now your child is free to vote, marry, apply for a credit card, make medical and financial decisions, sign contracts, and live independently. No wonder the law calls this coming of age “emancipation.”
But with “emancipation,” comes responsibility. No more can you make decisions for your child. He or she is an adult. As such, your child gets to make financial and medical decisions – for better or worse. However your child may not always be in a position to make those decisions. So, just as you do, your child needs powers of attorney documents in place.
Power of Attorney Documents
There are two types of power of attorney documents. One is called a Durable or Financial Power of Attorney. This documents enables someone, an agent, to make financial decisions on behalf of someone when they are incapacitated. Maybe they are ill. Or, maybe they are mentally unable to act on their behalf. In that case, a power of attorney agent could speak with creditors, pay bills, make financial investments on behalf of you.
Similarly, a health care power of attorney enables a person of your choosing to make medical decisions for you. That person is also called an agent – in this case a health care agent. Again, your agent only acts for you if you are not able to do so.
Why Your Adult Child Needs Powers of Attorney Documents in Place
OK, I know what you are thinking. But, I’m the parent. This is my child. Of course I can make decisions for him! After all, I’m paying his insurance. I’m the one who raised my child.
Unfortunately, the law does not hold these beliefs. Let’s imagine your adult child is hurt in accident. Due to the accident, he is unable to make critical medical decisions for himself. The law says you, as parent, do not have the right to make those decisions unless your child named you as his power of attorney agent. The law does not care that you are still paying for your child’s health insurance. It does not even matter that everyone knows your child would want you to make those decisions.
Unless your child executes a health care power of attorney naming you as his agent, you would be unable to act. I don’t know about you, but I would not want to be in that position- either as the child or the parent.
Without a signed power of attorney in place, you would need to proceed with a guardianship. And, if your child is so injured that a guardian is needed, you would not automatically be that person. Court proceedings would be required and those are expensive and time-consuming. Plus, the Court ultimately decides who will be the guardian. Could be you, could be some stranger. Do you or your adult child want to take that chance?
Of course not! So, to avoid having to potentially pursue a guardianship, your adult child needs to execute a health care power of attorney. A health care power of attorney would avoid that headache and would give you the standing you need, in one efficient document.
Not Just for Health Care
Health care is not the only matter where your adult child needs a power of attorney. Your adult child also needs a Durable or Financial Power of Attorney as well.
In money matters, you will not be permitted access to your adult child’s bank accounts unless your child has made you agent in a financial power of attorney. Now why would you need to access your child’s bank account? Well, you may need to obtain money to pay his rent while he’s in the hospital. Or, you may need to access the account to pay his bills. Banks and other financial institutions are not going to let you access your child’s accounts without you being appointed his agent.
And, although not a power of attorney document, your adult child should sign a “FERPA” disclosure statement when your child goes to college. A what statement? FERPA. FERPA stands for Family Educational Rights and Privacy Act. This law protects your child’s privacy regarding his education records.
Unless your adult child executes a FERPA disclosure statement, schools are not permitted to release education records to you. Neither the school nor FERPA cares if you are paying for your child’s education. When your child reaches majority, his grades, class schedules and more are protected from being released to anyone but your child. See:
https://www.cdc.gov/phlp/publications/topic/ferpa.html
So yes, your adult child needs estate planning. And, so do you! Set a good example and make sure you have your estate planning completed as well. After all, we learn by example.
Becoming an Adult is a Major Milestone
Becoming an adult is a major milestone. Your child’s 18th birthday would be a good time to explain about paying bills, getting a copy of the child’s social security card and birth certificate, living independently, registering to vote, and signing contracts to rent apartments, for example, or make major purchases like a car.
Remember to include the powers of attorney in that discussion. They are invaluable when your adult child needs you, at a stressful time when you do not want to hear any “no’s.” Powers of attorney could save you and your child delay, heartache, and expense.
We would be happy to help you or your child with the proper powers of attorney, as well as other planning needs that become more urgent as we grow older. If you’d like to discuss your particular situation in a confidential setting, please schedule time with us to do so.
