Vanilla

Dec 02, 2020

2 min read

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“How do I get a medical power of attorney for my adult child?” Plus other questions parents of young adults have about estate planning

With more young adults living with their parents now since the Great Depression, families with college-age children need questions answered about where parents’ legal rights begin and end.

As a financial advisor, you should be ready to answer the questions your clients have, such as “how do I get a medical power of attorney?” and connect them with the documents they and their adult children need to protect their families. This concise guide will help you point your clients in the right direction.

“What are the legal realities of my child turning 18?”

When a young adult turns 18, it can be an abrupt loss of legal power for their parents, especially those still financially supporting college-age children. The child literally transforms overnight into an adult in the eyes of the law.

As a minor, a child has limited rights and their parent or guardian is responsible for all legal, medical, and financial decisions.

At the age of 18, also known as the “age of majority,” a child gains:

• The right to vote. U.S. citizens 18 and older can register to vote and participate in elections.

• The right (and responsibility) to serve on a jury. U.S. citizens 18 and older qualify for jury duty.

• The right to enlist in the military. Adult males are required by law to register for the draft upon their 18th birthday.

• The right to privacy. Once a child turns 18, their parents no longer have access to their educational, financial, and medical records.

• The right to bodily autonomy. After a child becomes an adult, they have the right to make decisions about their mental health and medical treatment without their parents’ consent.

In addition to the above legal responsibilities, if a child is 18 or older, they’re responsible for their college tuition (unless their loans are co-signed) and all other living expenses, along with taxes (unless the parents can claim them as a dependent).

Many laws created to protect peoples’ rights can cause complications for parents who are still financially supporting their adult children. That’s why it’s crucial for you to make your clients aware of documents, like a medical power of attorney, that allow college-age children to waive their rights and designate their parents as agents in the event of an emergency.

“What documents should we have in place for our college-age child?”

A family should have documents in place that allow them certain privileges in the event of an adult child’s incapacitation or death. If their child has an accident or a mental health emergency and the family doesn’t have the proper protections in place, it can lead to nightmare scenarios for the parents. Without documents in place, parents of adult children may not be able to speak to their incapacitated child’s doctor or make decisions on their behalf.

Here are the legal documents that families can use to reflect the wishes of the adult children in case of mental or physical incapacitation:

Advance directives for medical decisions (including mental health decisions)

• A Living Will. A written, legal document that communicates a person’s wishes on how they want to be treated if they’re terminally ill, seriously injured, in a coma, mentally incapacitated, or near the end of life.

• A HIPAA Authorization Form. Lets doctors and healthcare providers know who they can speak with about an adult child’s medical condition.

• A Healthcare Power of Attorney. Also known as a medical power of attorney or healthcare proxy, it hands over the power to make medical decisions on behalf of an adult child to a designated agent, usually a parent or guardian. Each state has different statutes on healthcare proxies. If a child goes to an out-of-state college, have documents in place for both the college state and the home state.

Other legal authorizations

• A Durable Power of Attorney for Finances. Allows a designated agent such as a parent to manage financial transactions on behalf of the adult child. Transactions can range from a simple, one-time real estate purchase to more complex processes like handling investments. This is an essential document to have in place if a parent is still taking responsibility for their adult child’s college and living expenses or in the case of an adult child’s death or mental incapacity.

• A FERPA Consent Form. Allows parents of adult children to access education records that would otherwise be protected under student privacy laws.

“How do I get a medical power of attorney and other legal documents for my adult child?“

You (their financial advisor) can refer clients to an attorney, who can provide families with the most up-to-date advance medical directive and estate planning documents that reflect state laws.

Here are the steps you can take with your clients:

1. Start a conversation. Young adults should think carefully about who they want to make healthcare and financial decisions on their behalf. While this is usually a parent or guardian, some circumstances such as death, divorce, or family conflict may require that they consider other qualified, trusted adults to act as healthcare and financial agents.

2. Fill out documents with an attorney. We recommend that families consult an attorney before filling out documents. Many documents are downloadable for free but may require notarization or a witness. Also, a free, downloadable document may not be the most up-to-date version and, therefore, may not have legal bearing. Each state has its own variations of these forms and the way they can be combined.

3. Update each year. Your clients should review documents each year as laws change, and new life circumstances may dictate how their adult children wish to handle emergencies.

4. Use digital tools to stay ahead of estate planning needs. As a financial advisor, you have the ability to connect your clients with the documents they and their adult children need to protect their families. With Vanilla’s step-by-step estate planning documents, estate reporting, and one-on-one reviews with licensed attorneys, you can help your clients put their plans into action. If you want to learn more about how Vanilla works, get in touch.

The bottom line: It’s never too early to have a plan

The earlier you have conversations with your clients about estate planning, the better off their families will be in the long run. Use Vanilla’s simple, intuitive estate planning platform to advise your clients about estate planning for their families — at any age.

Deliver a standardized estate planning experience, no expertise required

This article is for educational purposes only and should not be considered legal advice. If you feel that the information in this article is pertinent to your situation, you may wish to consult a qualified attorney for advice tailored to your circumstances.