Once your child graduates from high school, it’s important to recognize that many things change from a legal standpoint, including the need for some basic estate planning documents for children over 18.
Below are several recommended steps you can take to get a basic estate planning foundation in place for an adult child, so parents can still be involved and assist their children when needed. Having these basic documents in place will avoid the challenging loss of control by a parent of a young adult child that might otherwise occur.
Have Adult Children Sign an Advance Directive
Even if you are the person paying for health insurance, you are not legally permitted to make healthcare decisions on their behalf. Therefore, you should have your child sign a basic estate planning document known as an Advance Healthcare Directive, designating who has the primary authority to make the child’s medical decisions if he or she is unable to do so due to incapacity. This is especially important when parents are divorced: both parents need to have the proper forms. Your estate planning attorney will be able to prepare these for you and make sure they are executed with the necessary formalities.
Include a HIPAA Authorization
Medical providers may not disclose a patient’s medical status without legal permission. That is why your adult children should sign a HIPAA authorization form allowing the parent access to all of their medical information. This is especially necessary for a child with physical or mental health issues. An estate planning attorney will typically prepare these along with the Advance Healthcare Directive referenced above.
Have Adult Children Over 18 Sign a Durable Power of Attorney
This is one of the most important estate planning documents that every adult absolutely should have. If your child signs a Durable Power of Attorney (POA) appointing a parent or parents as their agent, the parent(s) will be able to handle financial matters on the child’s behalf, sign documents on their behalf, etc. This is very helpful if your child becomes incapacitated, is traveling, or if you simply wish to be able to legally handle their financial and property matters for them or with them.
This is not a routine estate planning document, and the need for it takes many parents by surprise. Even if you are the one paying for tuition and all college expenses, the college will not provide academic records, including grades and tuition bills, due to the Family Education Rights and Privacy Act. Contact the college and find out exactly what forms they need to be sure you have access to all of your children’s information.
A Basic Will
Regardless of whether your child has children of their own, they need at least a basic Will to direct who gets their property in the event they pass away, and to allow the parent to act as Executor and handle the affairs of a deceased child. If the child owns or is going to own any real estate, talk to an estate planning attorney about whether a revocable living trust may be a wise idea.
Make sure the child has access to their medical records, including medications, allergies, immunizations, etc.
See if the family’s medical, homeowner’s and auto insurance coverage extend to a child living away at school and in another state. If the child is renting a house or apartment, make sure they have renter’s insurance.
Proof of identity
Make sure the child has access to their passport, birth certificate or Social Security card so they can get an internship or a job.
Bank accounts and credit cards
If the family’s regular bank does not have a branch where the child is attending school, the parents should consider opening a basic checking account at a local branch near the child’s school. Both parents and child should be authorized on the account, even if the child is the owner. If you are planning to be on title to the account with your child (as an owner) speak with an estate planning attorney about asset protection and gift tax ramifications if you plan on having a significant balance on the account. If you will be paying for certain expenses for your child, getting them a credit or debit card can be a convenient way to track and manage expenses.
Taking the above estate planning steps can help make sure you get your child started on a solid foundation that will serve them throughout their adult lives.