Planning considerations for young adults

We often think of estate planning as an important area of focus for people well beyond their teens. Rarely do we consider there to be a need for planning by a teenage child approaching 18 or a young adult child heading off to college.

However, when a child turns 18, it is essential to be aware of the critical legal and medical aspects that come into play.

For example, parents often assume they will always have the right to access their child’s medical information and the authority to make medical, legal, and financial decisions on the child’s behalf. But once a child is legally an adult, this is no longer the case.

Parents will need to ensure that certain legal documents are in place if they wish to continue managing the child’s financial and medical decisions if, for example, that child unexpectedly becomes incapacitated.

What legal documents are needed?

• Financial power of attorney
• Medical or healthcare power of attorney
• HIPAA release
• Advance Health Care Directive

What is a Power of Attorney or POA?

A Power of Attorney is a legal document that allows an individual to designate someone they trust to make decisions on their behalf. When it comes to medical decisions, having a POA ensures that if you are unable to make choices, you have a trusted representative who can act in your best interests.

Why do you need a HIPAA Release?

The Health Insurance Portability and Accountability Act (HIPAA) ensures the privacy and security of an individual’s medical information. Once you turn 18, your medical records become strictly confidential, and even your parents won’t have access to them without your explicit permission. A HIPAA Release grants designated individuals access to your medical records if needed.

What is an Advance Health Care Directive?

An Advance Health Care Directive is a document that authorizes someone to make medical decisions on your behalf when you are unable to do so. It also outlines your wishes in the case that life-altering decisions need to be made on your behalf.

Why do you need the powers of attorney (POAs), HIPAA Release, and Advance Health Care Directive?

Without these legal documents, parents will not have access to any of their child’s financial or medical records.

In other words, if a parent is not designated as their child’s representative, they will not be able to speak to doctors, hospitals, insurance companies, or even financial institutions about their child’s situation.

How do you implement the POAs, HIPAA Release, or Advance Health Care Directive for a young adult child?

1. Consult with an attorney to draft the necessary documents. Discuss the importance of the POAs, HIPAA Release, and Advance Health Care Directive. This simple step can protect you and your young adult child during unforeseen circumstances.
2. Explain and speak to your child about the reason and importance of these forms. Discuss with the young adult child whom they want to name as their representative and their wishes regarding medical treatment decisions. Presumably, the child would wish to name the parents as representatives to act on the child’s behalf. However, since the child is legally an adult, it is important to speak to them and confirm these details.
3. Inform your healthcare providers. After the child signs the forms, make sure your healthcare providers have a copy of the Medical POA, HIPAA Release, and Advance Health Care Directive on file. Also, provide a copy of the child’s financial POA to their financial institution. Taking these proactive steps will help ensure a smooth process during medical emergencies and avoid delays in accessing crucial information.

Learn More

For additional questions, we encourage you to contact your Westmount advisor at 310-556-2502.