Estate Planning

Adulting: Two Legal Documents Your 18-year-old Child Needs

You’ve raised an amazing child. And now, he or she is ready to embark on a new journey. Maybe it’s off to college. Perhaps it’s trade school, the military, or full-time employment. Exciting times for sure, but whatever the journey, one thing is certain. Your 18-year-old is now an adult, and your legal rights as a parent have come to an end.

Sure, your daughter or son will always be your child, but the hard truth is that legally, you have no say over their medical and financial decisions. They’re in charge of their future, and you may be a little nervous about that. But if your newly adult child executes two simple — but important — documents, you can rest easy knowing that their future is off to a good start.

Health Care Proxy

You get a call at 2:00 a.m. from your son’s roommate: your son is injured and in the emergency room. You call the hospital for his status, and find out that because he’s 19, the hospital can’t legally speak to you about his condition unless you’re his health care agent or proxy. The Health Insurance Portability Accountability Act (HIPAA) provides safeguards to protect the privacy of personal health information, even your loved ones.

That’s why it’s important for every adult to execute a Health Care Proxy of Declaration.

This simple legal document allows your child to appoint an individual as their health care agent, who’ll be informed of their medical condition and be empowered to make medical decisions for them if your child can’t make or communicate these decisions for themselves. This one person (who does not have to be a parent) has the authority to direct the medical care of your daughter or son, so the individual should be someone they know well and trust. The person they select as proxy must be at least age 18, and should also be comfortable making medical decisions and interacting with doctors and nurses. If possible, this document should be updated every 3 to 5 years to reflect any changes.    

Durable Power of Attorney

After your child’s personal health, his or her financial health can be a concern. That’s why your adult child should consider executing a Durable Power of Attorney. This document allows your son or daughter to appoint an individual, called an attorney-in-fact, to make financial decisions on their behalf in case they become incapacitated. If an attorney-in-fact is not in place, the court will appoint a conservator to manage their finances—a person who may or may not be to your child’s liking.

The Durable Power of Attorney can help in other ways, too. Let’s assume your college-aged daughter is spending a semester abroad studying French Civilization at Sorbonne University, and you realize that her financial aid paperwork needs to be signed by her and notarized. If you have been designated her attorney-in-fact, you can sign the paperwork for her and get it notarized. Again, the Durable Power of Attorney should be updated every 3 to 5 years.

You’re Still a Parent

Although your legal rights as a parent have ended when your child turns 18, you’re still a parent, and they may still want your guidance to help them to make good decisions. Introduce your adult child to your trusted estate planning attorney, if you have one, to execute a Health Care Declaration/Proxy and a Durable Power of Attorney. Even if your child doesn’t name you as one of the agents, the important thing is that they execute these two documents. And, depending on state law, these documents may have to be witnessed by two disinterested individuals and then notarized.

So, when you sing happy birthday on your child’s 18th birthday, celebrate their adulthood — and as part of their gift, encourage them to execute these two important documents. It’s the adult thing to do. 

Note: State and federal laws change frequently and the information above may not reflect recent changes in the laws. You should consult with your tax and legal advisors regarding your personal situation.

The material contained in this document is based on Penn Mutual’s understanding and interpretation of current law. Penn Mutual and its financial professionals and representatives may not give legal or tax advice. Any discussion of taxes in this document is for general information purposes only and does not purport to be complete or to cover every situation. You should consult with and rely on your own independent legal and tax advisers regarding your particular set of facts and circumstances.



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