I talked about about this in my January 5, 2015 blog, Off To College Estate Planning, but a new article on Wealth Management's website, What Documents Do Your Clients’ 18-Year-Old Children Need?, May 26, 2015, by David H. Lenok, summarizes the same issues again.
This is information we should all be considering, although the Wealth Management article does look at it from more of a marketing perspective, reminding financial advisers (Wealth Managerment's main focus) and to a lessor extent other planning professionals, that:
First, it’s just generally good business to create a relationship with the next generation as early as possible. The main thrust of estate planning is shepherding assets to the next generation, but planners often neglect to actually interact with those to whom the wealth is going. This oversight can lead to distrust, which can scuttle the best laid plans and, on a more selfish note, increase the likelihood that the next generation takes their business elsewhere.
David does point to the main reason why every adult, and that means every 18 year old, needs to have at least the power of attorney and health care directive:
18 year-olds are adults in the eyes of the law in most jurisdictions, and privacy laws intended to protect adults, like HIIPA, which limits the individuals to whom hospitals can release medical information, and FERPA, which restricts the information that a school can release about an adult student, can cause some complications for these “adults,” many of whom are still fully dependent on their folks both monetarily and emotionally.
There are numerous examples of well-intentioned privacy rules gone awry. Consider one incident reported by Consumer Reports in its 8/26/14 article, "Will You Be Able to Help Your Child in A Medical Emergency? Sheri Warsh, an Illinois resident and mother of a University of Michigan student, learned that her son had been rushed to the hospital. The hospital did not phone her; her son's roommate did. In a panic, she phoned the hospital to find out what was going on, but she was rebuffed by the person who answered the phone. "She told me I had no right to talk to the doctor," Warsh says. Can you imagine how you would feel if this was your child? Fortunately, her son recovered.
Another instance is reported by Deborah Jacobs in a Wall Street Journal article of 8/15/14. Alex Franc, a Penn State sophomore, had been vacationing in Mexico during a school break. After returning to the U.S. he fell ill and was admitted to the school infirmary. His father rushed to the school to see him, but the doctors refused to talk with him, citing privacy concerns. Alex was "out of it" at that point and unable to give consent even if he wanted to.
See Documents your 18-year-old needs, May 23, 2015, Joseph S. Karp, Esq.
The Wealth Management article details the need for a will, power of attorney and health care directive for everyone and is worth a read.
If you have questions about whether you, or your "adult" children need this planning, please do not hesitate to contact us.