3 legal documents every 18-year-old needs to have
As 18-year-olds across the country prepare to take their first steps into adult life – whether attending college, university, vocational training program, entering the workforce, or taking a gap year – parents of those now-adult-children should be aware there are important legal documents that should be in place to ensure they can continue to be there for their child if needed.
At 18, your child has reached the age of majority and many parents are surprised to learn they can no longer act on their child’s behalf to assist in medical or financial decisions. Should there be an accident or an illness that requires hospitalization, a parent could be shut out from knowing what is happening due to HIPAA laws and would be unable to make healthcare decisions for their child. Parents could also be frustrated to learn they can no longer contribute money into their child’s account without all of the appropriate account numbers, and that they cannot make a financial decision to assist their child.
Below are the three basic legal documents that every person 18 and over should have.
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 and could be subject to the claims of a creditor of the parent. 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. This document also allows a parent to make health care appointments for their child.
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 their child’s health information. This can be particularly upsetting for parents whose children are dealing with health issues, both minor and major, because the parent no longer has authority to discuss matters directly with their child’s doctor. The authorization of protected health information document gives parents that authority.
Health Care Directives
Similar to the power of attorney for property, the health care power of attorney or patient advocate allows the attorney-in-fact to 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, but 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 is another document a child may want to consider. A living will is a person’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 because they would prefer, if and when the time comes, to make the decision themselves. Living wills are available in most states, but Michigan does not allow for a living will.
Who gets appointed?
It is important to take note that as an adult, your child has the ability to decide who to appoint to each of the above documents and whether to grant particular power. By appointing both parents, either parent may act – this offers the most flexibility. However, another trusted adult may also be appointed, so it is important to discuss this decision with your child.
For questions or assistance in preparing any of these documents, contact the attorneys listed below.