With the summer season here and newly graduated 18-year-olds heading out into the world, parents may be ready for the inevitable transition to an empty nest – or at least a less active home. While the next chapter in life brings many reasons for celebration and optimism, it’s essential to plan for the next step.
When someone turns 18 in the United States, they are afforded a certain number of freedoms. But they also lose some of the automatic protections that come with being a minor. For example, parents are no longer able to act on their behalf when something unexpected happens.
A simple way to protect young adults when they are typically single without other guardianship is to set up an estate plan. Having an estate plan for an 18-year-old provides some insurance to the young person’s finances and healthcare.
Why an 18-Year-Old Needs an Estate Plan in Wisconsin
While a young adult is free to make their own decisions with finances and medical care, unforeseen circumstances can cause hardships to the person and their family. An estate plan can help.
Medical Advantages to an Estate Plan
With reaching the age of 18 comes the ability to care for one’s health. But what if something happens that leaves them incapacitated? Without a plan in place, a parent or guardian may not make medical decisions at the most crucial times.
The Health Insurance Portability and Accountability Act (HIPPA) Privacy Rule becomes effective at 18 and means that medical records are kept confidential between the individuals and their medical provider. Parents cannot access these records, and healthcare providers cannot disclose information on their child’s health without the proper documentation.
While some information may appear on the insurance statements if the young person is covered on their parent’s plan, they are not required to give any access to their parents beyond that. Within an estate plan, a young person can complete a medical power of attorney document or advanced directive that allows them to appoint someone that can make medical decisions about their healthcare should they become unable to do so. The medical power of attorney that is appointed would also be able to access prior medical records.
Something happening to a young adult’s health and wellness is an unfortunate situation. But it can be made worse if there is no plan to allow a parent to make crucial decisions when needed.
Financial Advantages to an Estate Plan
In addition to being able to make crucial medical decisions, parents are unable to access their child’s finances should they become incapacitate or get into trouble.
In the case of finances, a young person can name a durable power of attorney to handle financial needs if necessary. This can happen if they become incapacitated and are unable to take care of financial responsibilities or requirements. It can also come into play if the young person gets into trouble somewhere and cannot access their financial accounts. Parents would be rendered helpless to access their child’s finances unless they were named a durable power of attorney.
Estate planning for finances can also cover more traditional needs, such as ensuring that assets go to the right place should an untimely death happen. There are plenty of young people who have gathered a significant amount of wealth at an early age, and the protection of their estate is essential.
Given the unpredictability of life, newly minted 18-year-olds need to consider an estate plan. And parents that are concerned about their children’s wellbeing when leaving home can get peace of mind by having a proper plan in place in case of emergency.
If you need assistance with estate planning, contact the professionals at Collins Law Firm for a free consultation.