As graduating high school seniors across the country are filling their summer with graduation parties, work, and shopping for their dorm room or first apartment, parents should be considering a few simple legal documents that will assist them whether their child is commuting to a local college, moving to another state, or studying abroad.
Once a child attains age 18, they have reached the age of majority, and parents are no longer able to act on their behalf to assist in medical or financial decisions. It is a great shock when a mother who has coordinated doctor appointments and received test results is told she is no longer allowed to receive medical information for her child. It is frustrating for a parent who visits the local bank, to make a deposit into a child’s account, only to find out that because the child has reached the age of majority, parents no longer have the ability to contribute money into the account without all of the appropriate account numbers and cannot make a decision to assist a child, who is far away.
There are three basic legal documents that every child 18 and over should have. They are simple documents, and yet worth their weight in gold. They give as much or as little access as a parent needs to assist their child as they are navigating the new world that is open to them.
Durable Power of Attorney for Property
This document permits the person designated, the attorney-in-fact, to step into the shoes of the child to act with respect to finances and property on the child’s behalf. It allows a parent to access the child’s accounts without the account being owned jointly with a parent. An account owned jointly with a parent may be includable in the parent’s estate. An account solely in a child’s name gives the child autonomy, but with a power of attorney, a parent may still make deposits and transfers as necessary. This is true for bank accounts and brokerage accounts. A parent named in a power of attorney may also pay bills or handle other basic financial transactions on their child’s behalf.
If a child becomes incapacitated on a temporary or permanent basis, the parent may continue to handle finances and property without the necessity of a court appointed conservatorship, which can be costly and open to the public.
Authorization of Protected Health Information
The Authorization allows a child’s medical information to be shared with the person designated, generally the parents, or other trusted adult. The parent does not have the ability to make medical decisions, but rather simply the ability to receive health related information.
The authorization came about as a response to the Federal Health Insurance Portability and Accountability Act (“HIPAA”) which limits the ability of health care providers to disclose health information to anyone other than the individual. While it was intended to protect health information during electronic billing, an unintended consequence was parents found that they no longer had access to the child’s health information. This was particularly upsetting for parents whose children were dealing with health issues, both minor and major, because the parent needed to contact and discuss matters with doctors and did not have the authority. The authorization gives parents that authority.
Durable Power of Attorney for Health Care
Similar to the power of attorney for property, the Health Care Power of Attorney allows they attorney-in-fact to step into the shoes and make health care decisions for a child if the child is physically unable. It is more restrictive than the above referenced authorization, and is only to be used upon incapacity. This document is extremely important, and hopefully never has to be used. By preparing a health care power of attorney, the child appoints their parents, or another trusted person, to make medical decisions should they be unable. Should the Health Care Power of Attorney ever be necessary, the family does not have to go through the court system if there are any arguments as to who should be making medical decisions.
A living will may also be prepared, which is the child’s thoughts on whether or not they would like life-sustaining treatment if they are permanently unconscious and death is imminent. Some parents do not want a child executing a living will, and would prefer to make the decision themselves.
The child can appoint one or both parents to each of the above documents. By appointing both parents, either parent may act. This offers the most flexibility. These documents are the child’s documents and the child may choose who to appoint and whether to grant particular powers. As an adult, the child makes the decision.
As children are packing up and getting ready to start the next leg of their journey in life, these simple documents are extremely helpful for the child and for the parents they are leaving.