Until your child reaches 18, you are absolutely entitled to access your child’s medical records and to make decisions regarding the course of his or her treatment. And your child’s financial affairs are your financial affairs. This changes once your child reaches the age of 18 because your now-adult child is legally entitled to his or her privacy. You no longer have the same level of access to, or authority over, his financial, educational and medical information. As long as all is well, this can be fine. However, it is important to plan for the unexpected and for your child to set up an estate plan that includes at least the following three crucial components:
1. Advanced Directive for Healthcare with HIPAA Authorization
Under the Health Insurance Portability and Accountability Act (HIPAA), upon turning 18, your child's health records are now between the child and his or her health care provider. The HIPAA laws prevent you from even getting medical updates in the event your child is unable to communicate his or her wishes to have you involved. Without a HIPAA release, you may face many obstacles that prevent you from receiving critically needed information, including whether your adult child has even been admitted to a particular medical facility.
Should your child suffer a medical crisis resulting in the child's inability to communicate for him or herself, doctors and other medical professionals may refuse to speak with you and allow you to make medical decisions for your child. You may be forced to hire an attorney to petition to have you appointed as your child’s legal Guardian of the Person by a Court. At this time of crisis, your primary concern should be to ensure your child is taken care of; you do not need the additional burden of court proceedings and associated legal costs.
An Advanced Directive for Healthcare with a HIPAA release would enable your child to designate you or another trusted person to make medical decisions in the event he or she is unable to convey his or her wishes.
2. Power of Attorney
Like medical information, your 18-year-old’s finances are also private. If your child becomes incapacitated, without a Power of Attorney, you cannot access the child's bank accounts or credit cards to make sure bills are being paid. If you needed to access financial accounts to manage or resolve any problem, you may be forced to seek the Court’s appointment as Conservator or Guardian of the Property of your child.
Absent a crisis, a Power of Attorney can also be helpful in issues that may arise when your child is away at college or traveling. For example, if your son is traveling and an issue comes up where he cannot access his accounts, a Power of Attorney would give you or another trusted person the authority to manage the issue. Alternatively, you may want to encourage your child to consider creating a joint account with you. However, this is rarely recommended because of unintended consequences for taxes, financial aid applications, creditor issues, etc.
3. Educational Records Release (FERPA)
If your child is heading to college, you may also need a release under the Family Educational Rights and Privacy Act (FERPA). When signed by your child, this document gives written consent to the educational institution to share educational records with you as the parent. Otherwise, even if you are paying your child’s tuition bill, the educational records are private – you would not have any access to grade reports, notifications regarding scholarships (even if they are in jeopardy), or issues with financial aid documents, to name a few examples. If your child is battling any emotional or mental health issues, you may not be aware without access to these documents to show drops in grades or other indicators that your child may be struggling. All of these situations can put your child’s education and future at risk, as well as your own finances. This form can be requested directly from the college your child will be attending.
Your child owns any funds given to him or her as a minor or that he or she may have earned. In the catastrophic event that your child predeceases you, these assets may have to be probated and will pass to your child’s heirs at law, which absent any spouse or children, would be the parents. If you have created an estate plan that reduces your estate for estate tax or asset protection purposes, the receipt of those assets could frustrate your estate planning goals. In addition, your child may wish to leave some tangible property and financial assets to other family members or to charity.
While a Will may be less important for your child than the Advance Directive for Healthcare with HIPAA release or the Power of Attorney, ensuring that your child has all three components of an estate plan can prevent you, as a parent, from having to go to court to obtain legal authority to make time-sensitive medical or financial decisions for your child.
If you have a child (or grandchild) who is approaching adulthood or heading off to college, please contact our office to discuss preparing these critical documents.
Questionnaire for Healthcare Directive & Power of Attorney
Questionnaire for Healthcare Directive, Power of Attorney & Will