When someone is heading off to college, they’re thinking of dorm room accessories, class schedules, and meeting new friends. In all the excitement, it’s easy to overlook one significant thing. Estate planning. Don’t think that the age of 18 is too young to have these documents. They should be complete once a child leaves home.
What are estate planning documents every person should have once they turn 18?
Up until this point, the family has been used to the parent having the power to make decisions for their child. Once a child turns 18 and becomes a legal adult, however, that is no longer the case. They should have the following documents on hand just like any other adult.
1. Springing Power of Attorney
This document designates someone to make financial and business decisions for you if you become incapacitated. The word “springing” is used because it doesn’t “spring” into action until a person is incapacitated. This type of power of attorney is different than a durable power of attorney. A Durable Power of Attorney goes into effect the moment it is signed and stays in effect if someone becomes incapacitated.
A Springing Power of Attorney can grant general, broad powers, while others are spelled out with more specific powers. It is a tremendous responsibility and should only be given to someone trustworthy. Generally, someone with a power of attorney can:
- control over all your financial assets including your bank account manage your investments
- buy life insurance
- settle claims
- spend your assets
- operate business interests
- give gifts
- employ professionals
2. Health Care Power of Attorney
This document is also sometimes known as a Health Care Proxy. The Health Care Power of Attorney gives someone the power to make medical decisions for you if you become incapacitated. Whoever the person chooses as an agent will have to work with doctors and hospitals to make decisions that are following the person’s wishes.
This document is not the same as a living will. Some states will allow a Health Care Power of Attorney to contain someone’s wishes about being kept on life support.
You may choose to have a Living Will along with your Health Care Power of Attorney. This document establishes your wishes if the unthinkable happens. If you are on life support due to an accident or a terminal illness, are in a permanent vegetative state, or an irreversible coma, the Living Will provides instructions for your loved ones on what to do. It also covers any special instructions like your preferences for pain medications and nutrition.
3. HIPAA Release
HIPAA stands for Health Insurance Portability and Accountability Act, and it should be part of every young adult’s estate planning. A HIPPA Release states that information about their location and condition can be released. This document is vital because, without it, parents or loved ones may not even be able to find out if their child is in the hospital or not. Also, without a signed release, healthcare providers can’t even discuss your condition with family members.
- HIPAA is designed to protect your privacy and your personal health information. This rule means hospitals and doctors can’t legally release your data to anyone, even your parents.
- Your health file includes reports from:
- Medical Staff
- Health Insurance Plans
- Electronic Health Records
- Mobile Device Apps
- Web-Based Portals
Why is it important to have these estate planning documents?
It is essential to have these documents because you never know what is going to happen to you, or when. These financial planning documents ensure that your affairs are kept in order, and the right decisions are made for you. Remember, these documents are only valid if signed by someone who is mentally competent.
What are possible consequences that could come from not having these documents?
If you don’t have a financial and medical power of attorney’s set up, it turns into a court process. It is the same as if you die without a will. The court deliberates and then appoints someone called a conservator.
While this is usually a family member, it can be a long and expensive process. This experience can be very draining for people who are already going through a rough time. Also, you will have no say in who gets appointed as your agent, and this person will have broad powers over your life. If you don’t have a HIPPA document signed, your loved ones may legally not even be able to find you.
At 18, a person has officially become an adult in the eyes of the law. Having the right financial planning documents is the best way to give you peace of mind for your future.
Don’t let you or your child get caught without these essential documents. Contact us to handle all of your estate planning needs efficiently.