Often when we think of estate plans, we think about it in terms of protecting our assets when we die. But estate planning encompasses much more than property or money: It can also include appointing someone to make medical or financial decisions on your behalf if you become incapacitated. While many spouses do this for each other, they sometimes forget that their older children – who are perhaps away at college, or are just getting established after high school – also need someone to handle these types of responsibilities if something were to happen to them.

Parents are used to making decisions for their children as they grow up. They talk to the pediatrician when their child is sick; supervise their child’s financial affairs; and even oversee their child’s purchases. However, things change when a child reaches the “age of majority,” which is 18 in all but a few states. The age of majority is the point when a child becomes an adult in the eyes of the law – they are able to vote; join the military; and even sign contracts or agreements on their own. Even if you are paying for your child’s post high-school education or your child is still living under your roof, you no longer legally call the shots when it comes to that child’s medical or financial situation.

The privacy rule of the Health Insurance Portability and Accountability Act, better known as HIPAA, prevents parents from having legal access to their young adults’ medical records or other health care information. That includes situations where children are still on their parents’ medical insurance. If your child were to have a medical emergency in which they were unconscious or unable to make decisions on their own, you – as a parent – would not be able to receive information about your child’s condition or have a say in their care. The same goes for handling your child’s financial situation: You would not be able to sign legal documents on their behalf, or make financial decisions for your child.

With a simple estate plan for your young adult, you can avoid much of the heartache, confusion, and frustration. At a basic level, your child should have in place Powers of Attorney for Property and Health Care after they reach the age of majority. And, as your child’s life gets more complex, it may be appropriate to consider other estate planning items, such as purchasing life insurance to cover burial expenses, or identifying beneficiaries for bank accounts or a 401(k).

If your child will be reaching the age of majority soon, you may even want to explain why the next birthday includes an important legal milestone and begin to help your child think through these basic estate planning concepts.

Ultimately, having these important legal documents in place will give both you and your child peace of mind, create an efficient mechanism for handling affairs in the event of an accident or period of disability, and help set the tone for personal and family responsibility.

Author Michael T. Cyrs Senior Director of Wealth Transfer

Mike has nearly 30 years' experience as a private attorney and senior wealth transfer advisor concentrating in complex estate and business succession planning matters; estate, gift and generation skipping taxation; and advising clients regarding administration of highly taxable estates and trusts.

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