Dan and Melissa were estate planning clients of mine a number of years ago. They made a revocable living trust to hold their property, both to spare their children from probate court and to have their property held in trust until the children are at least 25 years old.
Last year, their youngest child turned 18 and left home to go to college. Dan and Melissa called me up and asked: isn’t it time that our son Joseph has his own estate plan? “Absolutely,” I said, and I applauded them for their foresight.
Before a child turns 18, parents have the legal authority to make health care decisions for the child and to manage whatever finances the child has. But when a child reaches legal adulthood, all that changes. On one hand, a parent no longer has the legal obligation to take care of a child. On the other hand, a parent loses the legal authority to step in and take care of a child if a child is incapacitated.
Few 18-year-olds own property. Most own little more than their personal possessions, cars, maybe a small savings account. If a young adult were to die without a Will in place, by law, everything they own would go to their next of kin: namely, their parents.
But what if a young adult is in a serious accident, or is traveling or studying abroad and needs legal help or medical decision-making?
Every person 18 years and older needs two basic estate planning documents: a Durable Power of Attorney for Financial Management and an Advance Health Care Directive. In both of these documents, a young adult names an Agent, and an alternate – probably his or her parents, or older siblings – to handle financial and medical affairs if the young adult is ever unable to do so for himself or herself.
Dan and Melissa brought their 18-year-old son Joseph to my office. He wasn’t particularly interested in estate planning, to say the least. But he’d been hearing about it from his parents and he was on-board with the idea of naming them as his Agents. It also turned out that he had inherited a sizeable monetary gift from his grandparents. He has no interest in investing it. Yet he is astute enough to know that his parents are wise investors and that the funds are best set aside until after he graduates from college. So, he had me make a simple revocable trust for him. He put the investment account in the trust and he named his parents as trustees to manage and invest the funds until he reaches the age of 25. Now that’s sophisticated estate planning by a young person!
I urge all of my clients who have young adult children to talk to them about the need to have at least a Power of Attorney and Health Directive in place.
