You’ve Turned 18, Now What? Important Legal Documents Every Young Adult Should Have
By Christopher Young, CFP®, CPWA®, CMFC®
Summer is winding down and kids of all ages are heading back to school. Parents with children of any age are often given a ‘back-to-school’ list full of school supplies needed for the upcoming year. For young adults heading to college, those lists are full of dorm essentials like furniture, bedding, and storage bins. However, during this exciting time where a gradual transition from dependent childhood to independent young adulthood starts to take place, there are a few items to consider that typically aren’t found on any back-to-school lists: important legal documents that can protect your young adult and your ability to act as their guardian in emergency situations.
It’s not an easy scenario to ponder, but imagine your 18-year-old child, while away at school, is severely injured in a car accident and is taken to the hospital. As soon as you find out, you call the hospital to check on your child’s condition but are told they are not authorized to provide you with any details because they do not have prior authorization permitting them to share information with you. Because of the Health Insurance Portability and Accountability Act (HIPPA), healthcare providers are unable to disclose information about a patient to anyone, even a family member, unless explicitly authorized by the patient. While healthcare practitioners are permitted to exercise professional judgment if the patient is unconscious or incapacitated, they may be reluctant to do so as they could face lofty fines and jail time if they violate HIPAA laws.
Sitting down with your adult child and having them sign the appropriate documents naming a parent or guardian as an authorized party to handle matters in the event of an emergency can eliminate many potential unforeseen issues.
Estate Planning Specialist Jessica Marchegiano Pannell, Esq. advises:
“There is nothing worse than being unable to obtain important medical information or make medical decisions on behalf of a loved one, especially when such angst can be avoided with proper counseling and execution of appropriate documents. Too often we see forms that aren’t accepted because they aren’t state-compliant, or medical powers of attorney that name joint agents, leaving no mechanism for handling the situation where the parents aren’t on the same page regarding the medical care of the child.”
Here are four critical documents that should be addressed with your young adult when they turn 18:
1) HIPAA Authorization
A signed Health Insurance Portability and Accountability Act (HIPAA) authorization by your adult child naming you as an authorized party gives you the ability to ask for and receive information from healthcare practitioners about your child’s health status, progress, and treatment. This is particularly important in the event your adult child is unconscious or incapacitated. Without a HIPAA authorization in place, the only other way to obtain information regarding your child’s health would be to have a court appoint you as his or her guardian. Young adults who want their parents to be involved in a medical emergency, but fear disclosure of sensitive information, shouldn’t be alarmed. A HIPAA Authorization does not have to be all-inclusive – you can specify which information should remain undisclosed. You can find more about the specifics of a HIPPA release form and even download a sample release form here.
2) Medical Power of Attorney (POA) or Health Care Proxy
A Medical POA or Health Care Proxy communicates your wishes in case you are unable to make medical decisions or communicate this information due to a medical emergency or incapacity. This includes executing a living will, which is a statement indicating you would not want to be kept alive by life-sustaining measures if in a coma or vegetative state with no hope of recovery. A good Medical POA form should also include a HIPAA disclosure authorization. If it does not, you can have an attorney prepare a HIPPA release form for you or you can find one online.
It’s important to note that because state laws differ, you should obtain a Medical POA that complies with the laws where your young adult will be residing. Some colleges may have their own specific forms, so you should check with the educational institution and be sure to sign any of their forms as well.
3) Durable Power of Attorney (POA)
A Durable POA authorizes a trusted person (usually parents or a legal guardian) to make important decisions or conduct matters on one’s behalf, even after they become incapacitated. A powerful distinction between a durable POA and an ordinary or “nondurable” POA is that a nondurable POA automatically ceases upon incapacitation.
With a Durable POA, the trusted person named would be legally permitted to take care of important matters for your young adult, e.g. paying bills or making investment decisions on their behalf, if they’re unable to do so themselves. When discussing this form with your young adult, you should stress the significance of this legal document, as the powers granted to the person named on the Durable POA are broad and provide the ability to make medical, legal, and financial decisions on the young adult’s behalf. While Durable POAs can always be updated at a later date, encourage your young adult to name someone they trust explicitly.
As with Medical POAs, Durable POAs vary based on state laws. For this reason, it’s advisable to have your Durable POA prepared by an attorney.
4) FERPA Release
The Family Educational Rights and Privacy Act (FERPA) is a federal privacy law that gives parents certain protections regarding their child’s education records. Once your child turns 18, however, many of these rights are transferred to the student themselves. As a parent, you have the right to review your child’s education records and to request changes under limited circumstances. To protect your adult child’s privacy, the law generally requires schools to ask for written consent before disclosing personally identifiable information.
By signing a FERPA release form, your child grants you access to obtain their personally identifiable information. FERPA release forms will remain in effect until a student submits written notification revoking consent. For more information, visit https://studentprivacy.ed.gov/frequently-asked-questions.
You Have All of These Documents Prepared. Now What?
Once these documents are signed and completed, keep the original forms in a secure location for safe keeping. Be sure to send them to the educational institution that your child will be attending. It’s also advisable to keep an electronic copy of these forms so that they are accessible to you on any device should you need them emergently. For more information about your child’s college years and beyond, a good general resource for collegiate parents is https://www.collegiateparent.com/about-us/
The thought of needing these documents someday isn’t a pleasant thought for any family. However, it’s better to consider and prepare for this scenario now than to ignore it and possibly find yourself in a difficult situation.
While discussing bedding options for your young adult’s dorm room is certainly a more enjoyable conversation, it’s imperative you discuss the importance of these legal documents with your adult children and have them signed before they leave. Your financial advisor and attorney together should be able to guide and advise you on these important documents.