If you have a college-aged child, you may need to get their estate planning started sooner than you think.
Consider these two fundamental estate planning documents – the durable power of attorney and the health care proxy. Even though they are usually thought of as only for older adults and seniors, younger people need them just as much. If a young adult does not have these, typically parents will not have the authority to make health care decisions or manage money for their kids after they are 18. It does not matter if they pay their college tuition, include them on their health insurance, and claim them as dependents on their taxes. In fact, without these fundamental documents, parents might need to seek court approval to act on behalf of their young adult children in the event the children are in an accident and become disabled.
A recent Forbes article, titled "Two Documents Every 18-Year-Old Should Sign," states that accidents are the number one cause of death for young adults. In addition, a quarter-million Americans between ages 18 and 25 are hospitalized with non-lethal injuries annually. With those numbers, it pays to have the documents in order so that you can help take care of your young adult child.
A health care proxy, also known as a "health care agent" or "health care power of attorney," permits another individual to decide medical issues on your behalf. In addition, this document also allows the agent to access your medical records. The companion to this is a living will. This document lets you state your desires for your end-of-life care.
A parent is typically designated to be authorized for medical and legal matters, but in some cases it may be another family member, such as an aunt or older sibling. Either way, you should designate an alternate in case your child’s first choice is unable or unwilling to serve when needed.
It can also be extremely beneficial to have a signed power of attorney when your son or daughter travels abroad, too. In the event some happens overseas, the power of attorney can help you cut through some of the red tape in a foreign country.
Hopefully your son or daughter understands the significance of having these documents. If not, perhaps you delegate this “conversation” to your estate planning attorney. He or she can draft a back-to-school package, speak to both of you, and explain the documents. Paying for this consultation may turn out to be an excellent investment.
Reference: Forbes (August 15, 2014) "Two Documents Every 18-Year-Old Should Sign"