In my 25 years as an estate planner, I occasionally witness a family cope with the serious injury or loss of a child. These can be some of the most difficult cases for an attorney to handle. We anticipate the death of our older clients as they reach the end of their natural lives. A tragedy involving a young family member can be a very different sort of traumatic experience.
The future is uncertain. Considering all the possibilities that may arise, should a young adult have estate planning documents? Parents of young children should prepare an estate plan that addresses their unique needs, such as the naming of guardians and using trusts to manage a minor’s potential inheritance. However, the 18-year-old child heading off to college needs a much simpler set of documents.
In most cases, a young adult has not accumulated wealth, therefore a Will or Trust that would pass on assets at death is likely unnecessary. A small bank account and a car can be passed on to parents without the need for an estate plan.
However, the incapacity of a young adult due to injury may require estate planning documents to help parents manage their affairs until they regain their capacity. The most common incident involving young adults is a car accident. During the time the child is in the hospital receiving treatment, someone will be named as the health care decision maker for the child.
Pennsylvania has the Health Care Representative law that designates who may make decisions for you in the absence of a Health Care Power of Attorney. There are classes of individuals named to act for you. An unmarried 18-year-old would have his or her parents named collectively as their representative.
This arrangement is helpful if the parents are going to act together. This would be problematic if the parents are divorced, and they are not communicating over the child’s care. It also has its limitations if the child is attending college in a state other than Pennsylvania. It is therefore prudent to consider the following documents if your child is heading off to college.
1. HIPAA Release: This is a document that permits designated individuals to receive medical information about another person’s care. Pursuant to HIPAA regulations, no medical information can be released, even to parents, without the patient’s consent. By signing a HIPAA release, parents can communicate with the medical providers regarding the care of their adult child.
2. Health Care Power of Attorney: A power of attorney allows an individual to act or make decisions on behalf of another. The heath care power of attorney is used when someone is incapacitated and the medical providers require consent for treatment. In addition, the document authorizes access to healthcare records, including insurance information. Coordinating payment for care can be one of the frustrating experiences for a parent when acting on behalf of a child.
3. Advance Directive for Healthcare: This document is typically combined with a health care power of attorney and sets forth the type of care a person would like if they are diagnosed with a terminal condition or are in a permanent state of unconsciousness, such as a coma or vegetative state.
4. Financial Power of Attorney: Although a young adult may not have significant savings, a financial power of attorney can help a parent engage in financial transactions on behalf of the incapacitated child. These could involve addressing payment issues for healthcare or college expenses.
All parents hope that they will never have to use estate planning documents for their child. Having the above documents in place will give parents peace of mind that in the event a crisis occurs, they will be able to legally address the healthcare and financial issues that arise.
