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Often times we think of estate planning when we are older or after we have children. However, it can be a very important step for children that are soon to reach the age of majority. Parents and families are often so busy planning for the transition of their children from high school to the next step in their life that they forget to think about what legal documents are needed for these soon to be adults. Once your child reaches the age of 18, you are no longer automatically permitted to make medical and financial decisions for your child.
We hate to think of those worst case scenarios but what happens if your child is 18+ and has a car accident and needs someone to make medical decisions on their behalf. As the parent, you are not automatically permitted to make those decisions. Your child should complete a health care directive (“HCD”) that names you as their health care agent.
A HCD is a written document that gives you the ability to name a trusted individual(s) to make health care decisions on your behalf when you are unable. By setting up a HCD, you get to choose who you want to be in charge of making your healthcare decisions and how you want your healthcare wishes carried out. If your child did have that accident and you needed to step in, without a HCD you may need to seek an emergency guardianship through the court system just to be able to help make those decisions for your child if you are not a named health care agent for your child.
Another important document for your child to set up is the power of attorney (“POA”). A POA form is a document that gives you the ability to name a trusted individual to access your financial accounts and step into your shoes to manage your finances when you are unable or unavailable.
The POA could be used in a variety of situations. It could be used in the above accident scenario where your child does not have capacity and you need to step in. If your child did not have a POA in place naming you to act, you may need to consider a court appointed conservatorship giving you the power to help manage your child’s finances. It could also be used if your child just needed your assistance with something in their financial world. For example, your child may ask you to help pay their bills and access their bank account, contact their landlord to discuss their lease or call a financial organization about a lost credit card. Your ability to obtain information and interact with the various organizations/individuals will be limited without a POA naming you to act on behalf of your child.
You can avoid these potential court processes and save some time and money by taking the time now to work with your child to get a HCD and POA in place. You may also want to consider having a simple Will in place for your child also. It is good to discuss this option with your attorney when you have the POA and HCD completed.
Please send me an email at rene@breenandperson.com with any topic suggestions or requests you may have. Although we cannot give you legal advice through the column, we can provide some general information that may be helpful for you to know. Our purpose is to educate and we hope that you can take something new away from this column each time you read it.