Pfenninger: Two documents every 18 year old should sign – Midland Daily News



Updated 10:00 am, Sunday, July 31, 2016

I recently received an email from a friend who is a financial advisor. It dealt with a health topic that’s very important but even I was unaware of the issue. We’ve reprinted it here for your review.

Two documents every 18 year old should sign

Financial and health care power of attorney documents are fundamental components of any estate plan. Executing these documents is essential if we wish to allow others to act on our behalf when we are unable to act for ourselves.

When we think about who will act on behalf of our adult children when health or other emergencies arise in their lives, we tend to automatically assume that as parents we can always step in for our kids when they can’t fend for themselves. Right? Wrong!

On a child’s 18th birthday, he or she becomes an adult in the eyes of the law. This is true even if you are still paying for his or her college tuition, housing, cell phone and car insurance, and it’s even true if you still carry the adult child on your health insurance plan and claim him or her as a dependent on your income tax return.

More importantly, once a child turns 18 parents no longer have any authority over their adult children’s finances or health care decisions without proper legal documentation.

A child developing the maturity to make independent choices is part of the normal process of turning children into fruitful adults. However, if a young adult is in an accident or becomes temporarily disabled, without a pre-existing power of attorney a parent will need to obtain court approval to simply act in their child’s best interest.

As much as we hope we’ve prepared them to take care of themselves in any situation, we are likely still our children’s fallback for emergencies. It could be a parent’s worst nightmare to find out the hard way that the law has cut some valuable and deep ties when your child needs you the most. And as the average age of marriage for young people creeps up into the late 20s, it’s likely there could be a ten-year or more window

of risk where there is no spouse to assume the role of advocate and you as the parent must act during times of crisis.

Fortunately, a simple solution exists. When your children turn 18 years of age, ask them to sign both a Durable Power of Attorney and a Health Care Directive, documents which will allow you to make decisions regarding emergency health care or step in and manage your adult children’s financial affairs should they be unable to do so themselves. Be sure the documents are valid not only in the state where you reside but also in your children’s states of residence.

The Health Care Directive consists of three parts: a health care power of attorney, which authorizes an agent to make medical decisions on someone’s behalf; a HIPPA release that will provide the agent full access to medical records; and a living will, which expresses a person’s preference regarding end-of-life care.

While the health care directive gives authority over medical decisions, a Durable Power of Attorney appoints an agent to act on the adult child’s behalf in a wider range of financial and legal matters. Not only limited to parents, any trusted family member, friend or adviser may take on the role of agent.

A power of attorney may become effective from the moment it is signed or it may be activated by a specific event — for instance, if he or she becomes incompetent. The problem with this approach, known as “springing power,” is that someone must decide when an individual has reached that state. For that reason we recommend a durable power of attorney that takes effect immediately.

Certainly these situations are not fun to ponder. But an ounce of prevention is worth a pound of cure when it comes to the health and well being of our adult children.

Used with permission from SYM Financial Advisors.

Dr. John L. Pfenninger’s column appears on Sundays. His office, Medical Procedures Center, is located in Midland.

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