Do you have a son or daughter who is 18 or older? When you were thinking of a birthday present for your newly minted adult child you probably did not consider legal documents but, maybe you should have.
Even though you may not consider your 18-year-old to be a full-fledged adult, you still cover the bulk of expenses and in an emergency, you will get the call and be expected to help. But in the eyes of the law, an 18-year-old is an adult.
So, what do you need?
There are three documents that you should probably have:
- Health Care Proxy with HIPPA Release (also known as Durable Medical Power of Attorney) – to allow you to speak with Doctors and make medical decisions if your child is unable to make his/her own decisions.
- Living Will – to stipulate wishes for end of life decisions.
- Durable Financial Power of Attorney – to allow you access to bank accounts and credit cards in the event of an emergency in order to make sure that bills are being paid and everything is ok.
Hopefully, you will never need to use these documents but, if your son or daughter is ever in a position that makes it difficult or even impossible to make these decisions for themselves, you will both be happy that you have them.
While there are free and low-cost versions of these documents available online, it can be beneficial to contact an attorney for assistance. An attorney can make sure that they are done properly and help you to avoid unnecessary legal battles during a crisis. An improperly or inadequately drafted power of attorney can result in costly legal battles. If a POA is deemed invalid, the only recourse is an expensive guardianship/conservatorship proceeding. An uncontested proceeding can cost thousands of dollars.
A licensed attorney might also be helpful if your son or daughter is a bit reluctant to give you this authority. Some young adults fear that this power may be abused by a parent to "spy" on a child by looking into their grades or medical records. An attorney can only legally represent one party, the parents or the 18-year-old. In this case, the attorney would represent the child and would be legally obligated to follow the wishes of the 18-year-old. Knowing that he/she has the power to make changes in the future and to ultimately control who makes the decisions might help to alleviate some of the fears that your son or daughter has about giving you this power. An attorney can give a professional opinion about why these documents are necessary and how they might be very helpful in a crisis.
Here are a few examples of times you might need them:
- Your child becomes ill while at college. You visit your child in the hospital and want/need to speak with the doctors about his/her condition and your child cannot communicate with the doctors to authorize them to share this information with you. The doctors can provide you with this information only if there is a valid Health Care Proxy or Medical Power of Attorney naming the parent(s) as
agent. Otherwise, the child would need to be capable of directly instructing them to do so (which would be impossible if your child was in a coma or otherwise incapacitated) or the parents would need to go through a time-consuming guardianship proceeding and get themselves appointed by the Court as the guardian.
(Health Care Proxy with HIPPA Release)
- Your child is in an accident and is left in a vegetative state.
- You child is traveling abroad, and an issue arises in which your child needs you to access bank and credit accounts in order to help.
Hopefully, you will never need these documents, but if you do, you will be glad you have them. As Registered Investment Advisor Representatives, we have seen cases in which these documents have come in handy for people of all ages and we recommend that all our clients have these documents in place to protect themselves if they would ever need them.
If you would like to talk more about your overall financial plan, please call our office and we would be happy to help.
Thank you, Maria Theresa B. Lopez, CFP®, JD Attorney and Counselor at Law for your assistance and expertise in writing this blog.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Maria Theresa B. Lopez, CFP®, JD Attorney and Counselor at Law, Pinnacle Wealth Management and LPL Financial are separate entities.
photo credit: jurvetson <a href="http://www.flickr.com/photos/44124348109@N01/38479599966">Happy 18th Birthday to my son</a> via <a href="http://photopin.com">photopin</a> <a href="https://creativecommons.org/licenses/by/2.0/">(license)</a>