Reasons Why Young Adult Children or Grandchildren Need Estate Planning
Parents may not always think of their 18-year-old children as fully grown adults, but they are in the eyes of the law. When it comes to estate planning, your children don’t need to be on the cusp of receiving a large inheritance to require attention. This is because there is a lot more to estate planning than just passing property along through wills and trusts. Although that certainly is important there are other documents and considerations involved, such as durable powers of attorney.
If your young adult child is in college or perhaps already in the workforce, what would you do in the unfortunate event that he or she fell seriously ill or was injured? You may think you could care for them the same way you did when they were kids living at home, but that’s not necessarily the case. In fact, parents, guardians, and grandparents can be in for a unsettling surprise when it comes to medical privacy laws, like HIPAA, or Hospital Insurance Portability and Accountability Act.
HIPAA requires adults to sign release documents for others to obtain their health information and medical records. If a young adult was away at college and had to be rushed to an emergency room, his or her parents might be legally obstructed from acquiring his or her personal medical information. The same holds for mental health records, which may be even more difficult to obtain.
One way to avoid such nightmare scenarios is to proactively craft advanced medical directives with a HIPAA provision. These documents designate certain individuals, such as parents, as legal agents who can make decisions on behalf of the young adult. Including a HIPAA release could help allow unobstructed access to personal medical information.
Similarly, a durable power of attorney would allow a named individual, or perhaps several individuals, such as parents and grandparents, to act on behalf of a young adult in the event that he or she becomes mentally incapacitated and unable to handle his or her own financial and legal affairs. Parents and grandparents could then make decisions concerning school scholarships, financial aid, bank accounts, investments, and even rental lease obligations. This can even include paying for tuition on your child’s behalf.
It’s highly recommended to regularly update an estate plan, and the beginning of a new year is a great time to do it. Any number of items may need attention, but ensuring the health and well-being of a young adult loved one may be the most important. Do you have questions? We encourage you to contact us to ask them now and in the new year!