Your Child (or Grandchild) Has Become an Adult - Set-Up these Critical Estate Planning Documents
Once your child reaches the age of 18 the state considers your child to be an adult with the legal right to govern their own life.
While your child is a minor you are entitled to access your child’s medical records and make decisions regarding any medical treatment. Your child’s financial affairs are also part of your financial affairs. And although their turning 18 is a great accomplishment for you both to celebrate, this will change the types of access you have as their parent. Once your child reaches the age of 18 your now-adult child is legally entitled to his or her privacy and you lose access and authority over their financial, educational and medical information.
This could create problems should your child be in a situation where they are not able to make their own decisions. It’s important to plan for the unexpected and for your child to set up an estate plan that at least includes the following three crucial components:
1. Ohio Durable Power of Attorney for Health Care with HIPAA Release
Under the Health Insurance Portability and Accountability Act, or HIPAA, once your child turns 18, the child's health records are now between the child and his or her health care provider. The HIPAA laws prevent you from even getting medical updates in the event your child is unable to communicate his or her wishes to have you involved. Without a HIPAA release, you may have many obstacles before receiving critically needed information, including whether your adult child has even been admitted to a particular medical facility.
Should your child suffer a medical crisis resulting in the child's inability to communicate for him or herself, doctors and other medical professionals may refuse to speak with you and allow you to make medical decisions for your child. You may be forced to hire an attorney to petition to have you appointed as your child’s legal guardian by a court. At this time of crisis, your primary concern is to ensure your child is taken care of and you do not need the additional burden of court proceedings and associated legal costs. A durable power of attorney for health care with a HIPAA release would enable your child to designate you or another trusted person to make medical decisions in the event they are unable to convey his or her wishes.
2. The Need for a Durable Power of Attorney When Your Child Turns 18
Like medical information, your 18-year-old child’s finances are also private. If your child becomes incapacitated, without a durable power of attorney you cannot access the child's bank accounts or credit cards to make sure bills are being paid. If you needed to access financial accounts in order to manage or resolve any problem, you may be forced to seek the court’s appointment as conservator of your child.
Absent a crisis, a power of attorney can also be helpful in issues that may arise when your child is away at college or traveling. For example, if your son is traveling and an issue comes up where he cannot access his accounts, a durable power of attorney would give you or another trusted person the authority to manage the issue. An alternative may be to encourage your child to consider a joint account with you. However, this is rarely recommended because of the unintended consequences for taxes, financial aid applications, creditor issues, etc.
3. Drafting a Will When Your Child Turns 18
Your child owns any funds given to him or her as a minor or that he or she may have earned. In the catastrophic event that your child predeceases you, these assets may have to be probated and will pass to your child’s heirs at law, which in most states would be the parents. If you have created an estate plan that reduces your estate for estate tax or asset protections purposes, the receipt of those assets could frustrate your estate planning goals. In addition, your child may wish to leave some tangible property and financial assets to other family members or to charity.
While a will may be less important than the power of attorney or HIPAA release, ensuring that your child has all three components of an estate plan can prevent you, as a parent, from having to go to court to obtain legal authority to make time-sensitive medical or financial decisions for your child.
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Estate Planning Guide
Included in this 2020 Estate Planning Guide is a comprehensive look into:
Probate. In terms of estate planning, there are two forms of probate to be concerned about: – death probate and living probate. This Estate Planning Guide covers them both, explains the difference and how to avoid expenses and burdens that can be associated with the probate process.
Drafting a Last Will and Testament. Why is relying on a Will alone is not part of a comprehensive estate plan.
Benefits of a Living Trust. What is a revocable living trust and how can it be an efficient tool to avoiding probate at your death, as well as to avoid living probate in the event of your incapacity.