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What Estate Planning Documents Do Your Young Adult Children Need?

Tiffany Tucker • Sep 07, 2017

No eighteen year-old wants to think about a living will or a durable power of attorney when they are heading off to college. Likewise, no parent wants to think that their eighteen year-old child needs documents like this. But the reality is, there are a few bare-bones estate planning basics that even the college freshman could benefit from and that become even more important for young adults in their 20s or 30s.

If something happens to your child while they are off at college, you as the parent have no right to see their medical records because of the “HIPAA” rules. Legally, parents are not able to make health care decisions without a signed healthcare directive naming them as agents authorized to act on the child’s behalf while they are incapacitated or unable to speak for themselves.

A durable power of attorney is a document that your young adult children could also benefit from. Powers of attorney name an agent to act on their behalf if they are unable to take manage for their financial affairs. If you, as the parent, are named as the power of attorney for your young adult child, you would be able to pay their bills or handle their financial affairs as needed in an emergency situation.

While most college students do not have substantial assets, a simple will might be needed to designate who should receive his or her assets and belongings in the event of death (even if it is just a baseball card collection). Wills become especially important once young adults have their own children, as this is the document that will name guardians for their minor children.

These simple estate planning documents will give you, and your young adult children, peace of mind in knowing that a plan is in place in case a tragedy occurs.

Tiffany can be contacted at 501-525-4401 or by email at tiffany@farrarwilliams.com. She can answer any questions you have about this subject.

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Communicating with your family about your estate plan is a sensitive but important topic. The need for good communication between seniors and their adult children is important as the children often have a role in the estate plan (whether it be as Agent under a Power of Attorney, Executor under a Will or Successor Trustee of the Family Trust). In addition to the basic estate planning structure, the discussions can include topics including when the senior should discontinue driving his or her car, when the senior should consider moving to residential care, and a number of other difficult topics to discuss. In addition to the above talks, there is another kind of talk to be had with your adult children. That is the talk by the parents to the adult child about how the adult child should protect any inheritance the adult child receives from divorce or creditor claims. If the adult child receives an inheritance, and co-mingles it with his or her spouse, then the inheritance is usually split 50/50 if there is a subsequent divorce. This is a result that neither the parent nor the adult child ever meant to happen. They simply did not understand the complex rules pertaining to a divorce (which varies from state to state). An inheritance should not be co-mingled with the spouse, unless the marriage is very solid and mature. What does co-mingling mean? It means depositing any inheritance into an account titled in the name of the adult child and his or her spouse. Another example would be the adult child purchasing a new home with the proceeds of the inheritance and titling in joint tenancy with his or her spouse. In either of those situations that normally results in the daughter-in-law or son-in-law being entitled to one-half of the amount so co-mingled. Further, if an adult child has creditors that they may be attempting to avoid, the parent should be aware of this so as to possibly structure the inheritance to protect the assets. This is a critical talk to have with the adult child. If one of your estate planning goals is to keep your in-laws out of your estate (or to protect it from your children’s creditors) so as to preserve it for your children and grandchildren, you should have your estate pass in trust for your adult children in a manner that they have generous access but it cannot be co-mingled. This is a common estate planning goal and can be accomplished with proper planning. Wesley Harris is an associate attorney at Farrar & Williams, PLLC, a law firm limiting its practice to trusts, estate planning, and elder law, located at 1720 Higdon Ferry Road, Suite 202, Hot Springs, Arkansas, and can be reached at (501) 525-4401 or at wesley@farrarwilliams.com . Wesley can answer any questions you have about this subject.
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