Four months into the COVID-19 pandemic, with many of our children having recently wrapped up their last academic year remotely, it seems surreal that in no time we will be thinking about back to school checklists, especially for our college-bound teens. In addition to the new COVID-19 considerations and all of the normal preparations that every new school year brings, there’s a lot to consider for our incoming college freshman (and any newly turned 18-year-old for that matter). Talking to our children about the importance of having certain legal documents in place to help protect them and plan for the “what ifs” life may have in store should be on every parent’s to-do list.
Once your child turns 18, he or she, legally, is an adult. When most children turn 18 they are still heavily reliant on their parents to assist them, frequently both medically and financially. However, it is at this time in your child’s life that a parent loses parental rights and no longer has the legal authority to assist in this regard. Therefore, parents are no longer automatically able to make medical or financial decisions on behalf of a child after his or her 18th birthday. However, with certain legal documents in place, such as a Health Care Proxy, HIPAA Release, and Durable Power of Attorney, parents (or any trusted adult of the young adult’s choosing) can continue to help them as they navigate the waters of early adulthood, which would be especially important in the event of an accident or illness that renders your child incapacitated.
Health Care Proxy
What if your child has an accident while he or she is away at school, or illness renders your child incapacitated? If you have not been identified and authorized by your child to assist in the event of a medical emergency, you might not even be notified that there is a problem.
A Health Care Proxy is a legal document that allows your child to authorize a succession of individuals to act on his or her behalf with regard to health care matters (especially important if he or she is unable to speak for himself or herself or is incapacitated). In order for the parent(s) to continue to be able to help the child with health care decisions and speak to medical professionals relating to the child’s health information, a Health Care Proxy should be signed by the child appointing the parent(s) to assist him or her in this regard. Unlike with a Durable Power of Attorney (discussed further below), it’s not advisable to appoint joint agents for health care decisions. But the child can certainly appoint the parents in succession to act on his or her behalf and can even direct the parents to consult with the successor agent appointed before acting (if possible depending on the circumstances).
The “Healthcare Insurance Portability and Accountability Act” signed into law in 1996 was designed the protect a person’s private healthcare information from disclosure. While protecting an individual’s personal information is, generally, a positive thing, for a an 18-year-old student that gets hurt while away at school and the parents cannot obtain any information about his or her care or condition, not having the authorization to speak to medical professionals would be problematic. At a minimum, if the child wants the parent(s) to be able to receive protected health information (i.e. have a conversation with medical professionals relating to the child’s health or even request billing information for an invoice that is being paid on a child’s behalf), a HIPAA release is legally necessary to allow medical professionals to speak to the parent(s) as it relates to the child after he or she has turned 18.
Durable Power of Attorney
While many young adults do not have significant assets, most do have small bank accounts, possibly credit cards, and access to certain digital assets. Furthermore, without the requisite authority, a parent might not be able to access information relative to the education that they are funding.
A Durable Power of Attorney (“POA”) is a legal document that allows your child to authorize one or more individual(s) to assist him or her with financial and related matters. The POA can be effective immediately upon signing, or the document can specify that the power granted is not effective unless and until the child becomes incapacitated (also referred to as a “springing” POA). The POA allows the person or persons appointed to assist your child with things such as paying bills, filing taxes, and managing bank accounts. If a child wishes for his or her parent(s) to continue to assist him or her with financial needs, the child should appoint the parent(s) to act as his or her agent(s) under a Durable Power of Attorney, either jointly or in some order of succession.
Having these documents in place usually prevents a parent or parents from having to go to court an initiate a guardianship proceeding to act as the child’s proxy for medical and financial matters in the event of an emergency, which can be time-consuming and expensive. Furthermore, if a guardianship proceeding is necessary and you have never had the conversation with your child to understand his or her wishes, they might not be realized.
All of the above documents can be tailored to ensure that your child’s wishes are reflected. While these are relatively common legal documents, care should still be taken to ensure that they are done correctly, thoughtfully, and timely (preferably in advance of when your child is scrambling to get everything ready to leave for college). As long as your child retains capacity, each of the above documents can be revoked and/or modified at any time and should be reviewed periodically to ensure that they still achieve the desired goals.
Once properly executed pursuant to relevant state law (where your child is domiciled), it is advisable for the child to keep a copy, and for copies to be distributed to the appointed agents, any of the child’s health care professionals, and to be filed with the child’s records at school.
While parents cannot force a child to sign any of the above legal documents, having a discussion about why the documents are important with your child is invaluable. In my experience, many children that continue to be supported by their parents after turning 18 (both emotionally and financially) generally seem willing to participate in voluntary estate planning that would allow the parent/child dynamic to continue during these formative years. Hopefully, these documents will never be needed. But, it’s better to have them in place and not need them, than to need them and not have them.
Naomi Becker Collier is Partner in the Trusts and Estates & Elder Law Practice at New Jersey-based Pashman Stein Walder Hayden. Naomi is a frequent author and speaker on estate, tax and lifetime planning with an emphasis on educational planning and the importance of promoting the best quality of life for her clients and their families. Learn more about Naomi and her practice on her website.