Many people start thinking about estate planning and Powers of Attorney (POA) issues only after they have reached a certain age and/or financial status. While this timing may seem reasonable, it also exposes those individuals to unnecessary risks earlier in life. If your child has reached college age, you should view this juncture as the right moment to get a head start on securing his or her future, not just by aiding in the selection of an appropriate school, but also by making sure that your child has an age-appropriate estate plan including Powers of Attorney in place.
Most U.S. states, including Arizona, recognize the age of eighteen as the age of majority. This threshold marks the legal transition from childhood to adulthood. Individuals aged 18 and older gain the right to marry, vote, apply for credit, make their own living arrangements, sign contracts and other legally binding documents, and live on their own. At the same time, parents lose the right to make these kinds of decisions on their children’s behalf—including the ability to know about and assist the child in health-related matters.
Parental rights expire at the age of majority even if your child still lives in your home or accepts money from you to pay for college and other expenses. If a child becomes incapacitated, because of a health-related or a similar emergency event, parents do not automatically regain the right to make key financial or health decisions for that child. Instead, in the middle of this crisis, parents would have to legally apply for guardianship or conservatorship or permit the court to assign an individual to make critical decisions.
The creation of an age-appropriate estate plan can prevent such unhappy scenarios from occurring. At the very least, your child should create an basic estate plan with both a Financial Power of Attorney and a Healthcare Power of Attorney. The Financial POA gives a parent or some other designated adult the right to access the child’s bank and credit card accounts, pay debts, and manage other day-to-day financial needs while the child is incapacitated. The healthcare POA grants the right to discuss with medical professionals the diagnosis and prognosis of the child and to give approval for certain medical procedures for an incapacitated person. The adult child’s primary care physician can be provided copies of this document to help ensure that medical professionals follow its stipulations to the letter.
Should college-aged children also create a Final Will and Testament and a Living Trust? If your child hasn’t had time to build independent wealth, buy a home, have a child, or purchase other valuable possessions, you might assume that these documents are not as important just yet. However, “value” can mean different things to different people. Your adult child will surely want to know that a beloved pet, personal keepsakes, personal accounts, and other prized belongings will go to individuals who will care for them properly. Without a Will and Living Trust enforce these preferences, the estate may go into probate, a lengthy and often frustrating process for survivors of the deceased.
Once a child is married or becomes a parent of a child or children, an entire estate plan is not only optional, it becomes essential. For instance, young adults may become single parents, at which point they must decide who they want to raise that child in the event of their death. A Last Will and Testament and Living Trust clarify their wishes, providing much-needed reassurance by entrusting the surviving child’s future to a trusted loved one instead of a court-appointed guardian, conservator, or Trustee.
Just as you should create your own estate plan as soon as possible and adjust it over time as needed, you should urge your child to do the same.
