Congratulations to all of our high school seniors! Graduation is just around the corner and so is college! We love this time of year, the celebrations and commemorations, and the anticipation of our young adults leaving the nest.
With all the excitement (and anxiety), it is easy to forget some important steps each young adult should take before they leave home. This transition comes with great responsibility and an added measure of liability. Does your child need an estate plan?
Please be aware: once your child is 18, you are no longer their legal guardian. This means you are no longer entitled to information about your child like healthcare or financial information. Unfortunately, many parents have been caught off guard when tragedy strikes and they did not have the right legal documents in place to help their child.
The legal entanglements can be avoided with the right documents in place.
How YOU can help?
This year, as a graduation present, consider helping your teen (grandchild, niece/nephew, family friend, etc.) with getting all the documents in place for emergencies by creating the following:
- Financial Power of Attorney- A financial power of attorney (POA) is a legal document that grants a trusted agent the authority to act on behalf of the principal in financial matters. This legal document will allow you to communicate with the financial aid office at school or manage your child’s financial affairs (including applying for benefits) if your child cannot for any reason.
- Healthcare Directive- The directive appoints an agent to make healthcare decisions for an individual when they can no longer do it themselves because of a severe injury or illness. By appointing the parent as the agent of the teen, you have authority to communicate with doctors and emergency personnel if your child is ill, incapacitated, or otherwise cannot communicate.
- HIPAA Authorization- A HIPAA authorization is a detailed document in which specific uses and disclosures of protected health information are explained in full. By signing the authorization, an individual is giving consent to have their health information used or disclosed for the reasons stated on the authorization. By having a HIPAA form pre-signed, you will be able to access your child’s medical records or any documentation pertaining to his or her care.
Please understand, while it may be in your child’s best interest to nominate you or another loved one as their agent under durable power of attorney, this choice is entirely up to them. Once young adults turn 18, they are legally emancipated and us parents have lost all control. When your child meets with an attorney, the attorney is obligated to make sure the young adult fully understands the implications of signing such documents and that they wish to do so of their own choice.
How to Update Your Estate Plan When Your Teen Becomes a Legal Adult
As your child turns 18, you may need to update your estate plan to reflect their new legal status as an adult.
This can be a confusing process, but don’t worry – we’re here to help!
In this article, we will discuss the steps that you need to take in order to update your estate plan for adult children. We’ll also provide some tips on how to make the process as smooth and stress-free as possible.
If you’re like most parents, you want to make sure your children are taken care of financially if something were to happen to you — even now that they are into adulthood.
While your young adult is still at an impressionable age, you may consider setting up a Living Trust so that the funds you are leaving behind are protected.
A Living Trust is the Cadillac of estate plans and allows you as a parent the greatest control and flexibility when it comes to protecting your assets for your children. With a Trust, you can:
- Stipulate how much money the child can receive and when;
- Decide what things the Trust will pay for, e.g. School, Medical, Housing, Food, etc.; and,
- Incentivize your child by offering to match their yearly earnings with a gift from the Trust. For example, you might authorize your Trustee to match your child’s yearly earnings by 50% thereby encouraging the child to earn more money and be a productive member of society.
Setting up your Trust in this way will help to prevent your beneficiary from blowing through a large sum of money and will protect those funds until they are financially mature enough to handle the funds without oversight.
Update an Older Will- Especially if You Still Have Minor Kids!
If you still have minor children at home, you should take a look at your Last Will and Testament. Chances are that you likely named a guardian who could raise all of your children if you passed away while they were still young.
Is the person you nominated still the best person for the job? Would you want your adult child to take charge of their minor siblings?
Update Your Designation Documents
Previously, we explained the importance of having a Power of Attorney and an Advance Directive for Healthcare in place in case of an emergency. It is just as important for each of us to ensure these documents are regularly updated to reflect all changes that take place in your life.
For example, if you have children who are now adults, you may want to name them in official “helper roles” so they can assist you with financial or medical decisions if you are unable to communicate.
Alternatively, if you don’t want your children to bear this burden, you may want to take a fresh look at who you’ve already designated in your plan to make sure they are still the best fit at this stage in your life. situation. If it has been more than 3 years since you created your estate plan, the attorneys at Rose Elder Law offer a 30-minute review of your plan at no charge. If your plan was created by another attorney, the review will take an hour and the first 30 minutes is free. If you have any questions or concerns about updating your plan, we encourage you to contact us. We would be more than happy to help you through the process.
It is important to update your estate plan as your life and the law changes through the years, and having a child turn 18 is certainly one of these milestones! Of course, this blog post covers just a few examples of how your estate plan may need to change, and there are likely other areas that may require updates that are unique to your situation. If it has been more than 3 years since you created your estate plan, the attorneys at Rose Elder Law offer a 30-minute review of your plan at no charge. If your plan was created by another attorney, the review will take an hour and the first 30 minutes is free. If you have any questions or concerns about updating your plan, we encourage you to contact us. We would be more than happy to help you through the process.
About Rose Elder Law
From Estate Planning to Medicaid Qualification, our firm works hard to protect your legacy! No matter your position in life, we all face many uncertainties. Planning for the unexpected is the best way to protect what you have worked so hard to obtain. Let us help you with the legal planning that will ensure your legacy for generations to come.
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Text or Call: 971-865-3171
Address: 5200 Meadows Rd #150, Lake Oswego, OR 97035, USA