What if you have to step in?
This is a commonly overlooked item in estate planning. Most people think about taking care of their children financially, but almost never think about if something bad happens to their adult child. If you have a child or children over 18, if you are not named as their power of attorney or as a decision maker in health care directives you may be blocked in assisting your child in their medical, education and legal issues.
You may not have the rights you think you do.
People assume they have more rights to their student’s information than they really possess. Even though your student is on your health insurance plan and you pay all of his or her medical bills, that does not entitle you to make medical decisions for them in case of an emergency or to get full details of their health crisis or injuries. You are probably not entitled to any information about their medical records – even for such things as a claim dispute. If you pay all of the costs of a child’s college expenses, that does not entitle you to see their grades or discuss their education with a counselor. If your child is out of the country or just a long distance away, you probably cannot act in their behalf.
What documents should you have?
Without these documents, you may not step in when your child needs you most. Se encourage your child to get the following documents before heading off to school:
- Durable Power of Attorney: The Durable Power of Attorney will allow your child to authorize you to manage his or her financial affairs either immediately or in the future should he become mentally or physically unable to do so. This would authorize you to handle tasks such as paying bills, applying for social security or government benefits and opening and closing accounts.
- Medical Power of Attorney: The Medical Power of Attorney allows your child to authorize you to make medical decisions if he or she is incapacitated and unable to do so. An agent acting under a Medical Power of Attorney may see the principal’s medical records to make informed medical decisions on his or her behalf.
- HIPAA Release: HIPAA (the Health Insurance Portability and Accountability Act of 1996) requires health care providers and insurance companies to protect the privacy of patient’s health care information. Those who violate HIPAA are subject to civil and criminal penalties, including jail time, which makes them reluctant to share protected health information without an authorization.
- FERPA Release: You also might want a FERPA release, which allows your child to get access to educational records.
What do you say to your now, Adult, child?
You child is transitioning into adulthood and therefore may be reluctant to provide what they perceive as continued authority. They are adults and treat them that way. Talk to them like an adult and explain what might happen if they have a medical emergency or need you to help with financial matters. Tell them they can revoke these documents. Lastly, discuss with them how and why such documents will be used.
Putting these documents in place can be one of the best things you can do for your child. It does not have to be expensive, but it must be done correctly.