Most Families Reluctant to Talk About Estate Planning

April 16th is National Healthcare Decision Day
Estate Planning Tips for People Under 40
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Most Families Reluctant to Talk About Estate Planning

Two Documents Every 18-Year-Old Should Sign

If you are about to send a child off to college or employment, you’re probably busy with last-minute shopping, packing and worrying about roommates. Here’s one more thing you should do as you prepare for the big separation: Ask this young adult to sign a durable power of attorney and a health care proxy.

These two estate planning documents, more commonly associated with older folks, are essential for younger people too. Without them, in most states parents don’t have the authority to make health care decisions or manage money for their kids once they turn 18—even if they are paying the tuition, still have those kids on their health insurance plans and claim them as dependents on their tax returns. That means if a young adult is in an accident and becomes disabled, even temporarily, a parent might need court approval to act on his or her behalf.

The risk is real. Accidents are the leading cause of death for young adults, and a quarter-million Americans between 18 and 25 are hospitalized with nonlethal injuries each year.

As an example, after traveling to Mexico for spring break, a college freshman developed a severe intestinal bug that landed him in the college infirmary. His Father rushed to visit him there, only to find that doctors refused to discuss his son’s condition, citing privacy concerns.

Fortunately, the Son promptly recovered. But the temporary scare to his concerned parents could have been avoided if he had signed a Medical Power of Attorney before he went off to college. This document authorizes someone to make medical decisions on your behalf. Used in conjunction with a Health Care Portability & Accountability (HIPAA) release the agent access to medical records.  A separate one called the Directive to Physicians, you can express your preferences about end-of-life care.

The Father realized it was a case of the cobbler’s children going barefoot, since he is a trusts and estates lawyer and routinely handles these matters for clients. The next time his son came home for vacation, he had not just a Medical Power of Attorney & HIPAA Release, but also a Durable Power of Attorney for him to sign. The Durable Power of Attorney appoints a trusted agent, usually a Parent,  to act on one’s behalf, if needed in a variety of financial and legal matters.

You may prefer another trusted adult, such as an aunt or uncle if they are closer to the student’s school. It’s also important to name an alternate in case, if and when the time comes, your child’s first choice is unable or unwilling to serve.

Though parents often pay for tuition, they are not parties to the agreement between student and school, Franc explains. Rules vary from one institution to the next, but many schools will not disclose grades without a student’s permission. A power of attorney, may also be used to get access to the transcript, Franc says.

But you don’t have to be a helicopter parent to need a power of attorney. It can be useful in a variety of situations that can arise when children go overseas to study, or in case of an emergency, It could also come in handy if a parent needs to sign a legal document, such as a lease, in the child’s absence.

How can you get children to sign these documents, especially if they are still at the stage of thinking Mom and Dad are clueless about practically everything? Gentle persuasion works best.  Another possibility is to make it a condition of your paying the tuition or buying your child a car—if that’s in the offing.

Another tack is to ask a lawyer to prepare this back-to-school package, meet briefly with you and your child and explain the significance of the documents. Compared with other back-to-school expenditures, the roughly $300-400 you will pay for this service could turn out to much less expensive than the Court managed alternatives.

Credit to Forbes Magazine for portions of this article.

S. Craig Daniell provides Woodlands and Harris County residents with personal attention for estate planning, administration and litigation legal services.  When disputes between families, arise, they are very successful in resolving legal estate issues quickly and efficiently while preserving financial and emotional resources.

A recent Fidelity Investments survey found that a majority of American families have a hard time talking about wills, elder care and retirement planning.  In fact, a majority surveyed said they feel much more comfortable discussing estate planning issues with a third party – like an estate planning attorney – than other family members.

Some other interesting findings from the report:

  • 97% had conflicting opinions between the generations on the topic of whether children will care for parents if they fall ill;
  • A majority of children underestimated their parents’ wealth by about $100,000;
  • 30% of parents do not want their children to rely on an inheritance;
  • 40% of children said it was none of their business to ask about the contents of a will;
  • 97% of parents said they do not need help in retirement, but 24% of their children said they do.

Discussing these issues is often taboo in families, but there are real financial and emotional consequences when these conversations don’t take place.

Do your family a favor and take some time out during the holidays to discuss these important matters with the people who matter most to you.

National Healthcare Decision Day – Part 2

Posted By Mark Snow

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