When children reach adulthood, there are some estate planning considerations every family should think about. In particular, as college students begin heading back to school, they should probably add estate planning to their to-do list for early in the school year. Seriously? Seriously.
An estate plan can be an important item for young adults. Most college students are at the age where they are considered adults under state law, which means the rights of a parent to make decisions for an adult child can be very limited. For instance, parents may no longer have the legal right to access a child’s educational, financial, or health records. Without advanced permission, a parent may not be able to help with decision-making if an adult child has a health problem or becomes incapacitated. FMJ’s Estate Planning Team is also seeing more frequent requests to prepare estate planning documents for students, and some institutions are even starting to require certain documents as a condition to enrollment.
Strategies to Consider
First and foremost, a parent should make their young adult children aware of their independence under the law. Reaching adulthood carries with it some new legal implications that not everyone is thinking about. In some cases, people become unable to make decisions or act on their own behalf because of health or cognitive impairments. In these situations, it is important for people to have someone they trust who can make decisions for them. Here are some common options we help clients with at FMJ:
Financial Power of Attorney
A financial power of attorney is a document that could give a parent or another trusted person permission to act on adult child’s behalf. The adult child would be considered the “principal,” and the parent would be considered their “agent” or “attorney-in-fact.”
The adult child can decide how much authority they want their agent to have over their affairs. A general power of attorney gives an agent the ability to act on a person’s behalf in all of their affairs, while a limited power of attorney grants an agent authority in specific situations. A person may choose to make their power of attorney “durable,” which means it stays in place even if the person becomes incompetent or incapacitated.
A principal can also revoke a power of attorney. For example, somebody facing surgery may complete a temporary power of attorney but then revoke it once they are healed. Ultimately, a mentally competent person can remove a power of attorney at any time with a signed document.
Health Care Directive
A health care directive, sometimes called an advanced medical directive, is a legal document that provides instructions for medical care, and it only goes into effect if a person cannot communicate their own wishes. These directives can be used to tell medical personnel how you want to be treated with respect to common medical treatments and conditions, and which treatments you might want to avoid. There are also planning options to help name representative to help make treatment decisions in the event of incapacity.
Other Forms
There are other forms that can be helpful for young adults to have in place. For example, it would be helpful for a college student or their parent to have a HIPAA release form on file if that student wishes to have their medical/health care information released to their parent.
Takeaways
It can be very important for a young adult, especially a college student, to implement a financial power of attorney and advanced medical directive (Health Care Directive) appointing their parent or another trusted individual to act as their agent for financial and health care issues that may arise upon their incapacity or while they may travel abroad. Estate planning is about avoiding a potential mess, and a little planning goes a long way – even for young adults. FMJ’s Trusts & Estates attorneys are here to help and can advise parents or college students through the process.
If you or a young adult in your life are interested in learning more, please contact our team at estateplanning@fmjlaw.com or reach out to the attorneys directly – David Ness at david.ness@fmjlaw.com, Karen Schlotthauer at karen.schlotthauer@fmjlaw.com, Josh Damberg at joshdamberg@fmjlaw.com, or Holly Hankins at holly.hankins@fmjlaw.com.
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