By Nancy J. Brady, Esq., Partner,

Brady & Marshak, LLP Attorneys at Law

With the end of summer, many of your children and grandchildren are heading off to college, and away from home. The fact that he/she will be away from you geographically, coupled with the fact that once your child has reached the age of 18 the state considers your child to be an adult with the legal right to govern his or her own life makes it just as important for young adults to have estate planning documents in place.

Up until your child reaches 18, you are absolutely entitled to access your child’s medical records and to make decisions regarding the course of his/her medical treatment. Additionally, your child’s financial affairs are considered to be your financial affairs. This changes once your child reaches the age of 18 because your now-adult child is legally entitled to his/her privacy, therefore, you no longer have the same level of access to or authority over his financial, educational and medical information. Estate planning for young adults is often overlooked, however, it’s important to plan for the unexpected and for your child to set up an estate plan that at least includes the following three crucial components:

  1. Health Care Proxy with HIPAA Release

Under the Health Insurance Portability and Accountability Act, or HIPAA, once your child turns 18, the child's health records are now between the child and his or her health care provider. The HIPAA laws prevent you from even getting medical updates in the event your child is unable to communicate his or her wishes to have you involved. Without a HIPAA release, you may have many obstacles before receiving critically needed information, including whether your adult child has even been admitted to a particular medical facility.

Should your child suffer a medical crisis resulting in the child's inability to communicate for himself or herself, doctors and other medical professionals may refuse to speak with you and allow you to make medical decisions for your child. You may be forced to hire an attorney to petition to have you appointed as your child’s legal guardian by a court. At this time of crisis, your primary concern is to ensure your child is taken care of and you do not need the additional burden of court proceedings, potential delays in treatment and associated legal costs. A health care proxy with a HIPAA release would enable your child to designate you or another trusted person to make medical decisions in the event your child is unable to convey his or her wishes.

  1. Durable Power of Attorney

Like medical information, your 18-year-old child’s finances are also private.  If your child becomes incapacitated, without a durable power of attorney you cannot access the child's bank accounts or credit cards to make sure bills are being paid. If you needed to access financial accounts in order to manage or resolve any problem, you may be forced to seek the court’s appointment as conservator of your child. The power of attorney can also provide authority over your child’s digital or online accounts and passwords in such an emergency situation.

Absent a crisis, a power of attorney can also be helpful in issues that may arise when your child is away at college or traveling. For example, if your son is traveling and an issue comes up where he cannot access his accounts, a durable power of attorney would give you or another trusted person the authority to manage the issue. An alternative may be to encourage your child to consider a joint account with you.  However, this is rarely recommended because of the unintended consequences for taxes, financial aid applications, creditor issues, etc.

  1. Last Will and Testament

Your child owns any funds given to him or her as a minor or that he or she may have earned. In the catastrophic event that your child predeceases you, funds earned during your child’s lifetime, as well as proceeds from any lawsuit are assets that may have to be probated and will pass to your child’s heirs at law, usually his or her parents. If parents have created an estate plan that reduces the parents’ estate for estate tax or asset protection purposes, the receipt of those assets could frustrate estate planning goals. If the eighteen year old wishes, a Last Will and Testament can make provisions to leave tangible (personal) property and financial assets to other family members or to a charity.

While a Will may be less important than the health care proxy, HIPAA release or durable power of attorney, ensuring that your child has all three components of an estate plan can prevent parents from having to go to court to obtain legal authority to make time-sensitive medical or financial decisions for your child.

If you have a child (or grandchild) who is approaching adulthood, talk to the young adult about meeting with an estate planning attorney about executing these three crucial documents as they prepare to enter the next phase of their young lives.

This information is not intended to be individual legal advice. For specific legal advice you should consult with an attorney.  The attorneys at Brady & Marshak, LLP can be reached at 1-718-738-8500.