If you have a high school senior in your home, then you are probably gearing up for a major event this month - - graduation! This summer will be a period of transition for your entire family. Whether your graduating senior is headed off to college in the fall or choosing a different life path, it still is a period of transition as your teenage child may be turning 18 (or perhaps already has turned 18!).
And if you already didn't feel like you have lost some control of your child's life during their teenage years, when he or she turns 18, this will become legally true. This is when your child will be legally considered an adult and you, as parents, will lose certain rights you once had before.
When most people think of estate planning, they typically associate it with something that you do when you are older or when you have money. However, when your child (or grandchild) turns 18 years old, they legally are given the right to govern their own life. This means that you, as a parent, lose your access to your child's financial, educational and medical information. This is great provided all is well and fine, but as life would have it, there are circumstances that a parent of an 18-year-old child would never even think about needing to go through that could happen. And that's what estate planning is all about. It is a means of handling situations that could happen.
Below are two must-have estate planning documents that we recommend to every client of ours with an adult child (or grandchild):
- HIPAA Release and Health Care Directive. When your child turns 18, the child's health care records are now legally kept between the child and his or her healthcare provider. The Health Insurance Portability and Accountability Act, otherwise known as "HIPAA", was a law set up to protect peoples' privacy. However, this law (as well as a unique law in California known as the Confidentiality of Medical Information Act, or CMIA) has had some unintended consequences as well, by shutting out loved ones in times of crisis. For example, if your child is off at college and is in an accident and is taken to a hospital, you may be prevented from receiving critical information about this, including even being notified that your child was admitted to a medical facility! Medical professionals are prohibited from speaking with you about the condition of your adult child and you will not be able to make any medical decisions for your child in situations where your child is unable to communicate and make any decisions for him or herself. A HIPAA Release and Health Care Directive will allow your child to designate you (or another trusted individual) to be able to speak with medical professionals and make medical decisions on his or her behalf, if necessary. Having these important estate planning documents in place for your adult child will allow you to quickly ensure that your child is properly taken care of during a time of crisis, while also avoiding the unnecessary hassle of court proceedings and the legal costs to establish a Conservatorship to help your child.
- Durable Power of Attorney. Like your child's medical information, his or her finances become private when they turn 18 years old. Again, in the event that something happens to your child, you might be needed to access his or her bank accounts and credit cards and will not be able to do so unless you have what is known as a Durable Power of Attorney put in place that appoints you (or another trusted individual) to do this. Some people choose to open joint accounts with their child. While this would avoid any issues with having access to the accounts, it is not recommended since it could have unintended consequences, such as applying for financial aid, creditor claims, taxes and more!
As you can see, these are extremely important documents that will help in situations that we hope you never have to go through with your child. If we had a way to prevent the "could happens" in life, we would. Unfortunately, those are out of our control, so it is best to be prepared in the event that something does happen. This is where we can help you.
If you have a child (or grandchild) who is approaching adulthood or who is already 18 years old or older, contact our office to get more information about how we can help you and your family get these important documents in place. If you would like to schedule a free 90-minute consultation with one of our attorneys, attend one of our upcoming free Living Trust Seminars. You can also contact our main office at 1-800-756-5596. If you are unable to attend an upcoming seminar, please feel free to join our e-mail list and we will be sure to e-mail you of future seminar dates.
This post is brought to you by the good folks at the Law Firm of Kavesh, Minor & Otis, Inc., servicing the estate planning needs of those in the Los Angeles and Orange County areas of Southern California for over 37 years. We recommend attending one of our free seminars, where you can book a free attorney consultation and even qualify to receive a fee discount. You can contact us at 1-800-756-5596 for more information. We'd also love to connect with you on Facebook, Twitter or LinkedIn.