As a bookkeeper, I have many contacts who offer great information to their clients and business associates. A few weeks ago I received a newsletter from a CPA/Financial Planner with great information I want to pass along to you. I have one child turning 18 in a few months, and one will be 20 toward the end of the year. I have to admit that I didn’t think of this information for my own kids, so I bet many of you are in the same boat as me. Following is content shared by Cherie Putman of Putman Financial Group.
With turning 18, all kinds of new responsibilities ensue, from voting to making medical and financial decisions, and the fact that parents become optional.
As I sat and thought through the potential ramifications and legal occurrences that one birthday makes, I’ll admit, I had a somber moment. Not from the standpoint that our son is now considered an adult, but from the perspective that when I look at my son, I still see a kid who leaves socks on the floor, needs to be told to make his bed, and is probably not ready to make medical or financial decisions that could impact the rest of his life.
Unfortunately, that is not what the law sees. 18 year olds are now viewed as adults and as such, they enjoy the same privacy rights that we, as parents do. Yes, we, as parents, still provide all or most of their support – financial and emotional. But that is irrelevant in today’s society. With adulthood, our adult child can vote, enlist to serve our country, serve on a jury, buy a house, get married and get arrested.
Is that a bad thing? Not really, until one considers the effects of the privacy laws and what the ramifications are if your adult child has a medical or financial emergency. Without certain legal permissions, your ability to make decisions on their behalf is limited.
The following are two areas of concern:
- Medical: Most of the time, your 18 year old will remain on the family medical insurance, but do you know that your access to your adult child’s medical records as a parent under HIPAA (Health Insurance Portability and Accountability Act) privacy rules is now limited? In fact, in the event of an emergency, unless your adult child has given you a medical power of attorney, you may not be able to assist or order necessary medical treatments.
- Financial: If your 18 year old has separate checking and saving accounts that do not have your name on the account, you will not be able to access the account, even in the event of an emergency. Furthermore, you will no longer be able to discuss a credit card bill (despite the fact that you are a co-signer), nor be able to discuss the tuition bill for college that you pay for, or view their grades, thanks to FERPA (Family Educational Rights and Privacy Act).
In order to help your adult child and protect them, please consider coaching them to execute the following documents (and of course, consult with legal counsel):
- Durable Power of Attorney: In this document, your adult child will name a person or persons who may make their financial and legal decisions.
- Medical Power of Attorney and HIPAA Authorization: A medical power of attorney allows your adult child to grant a person or persons that they trust with the authority to make his/her medical decisions if they become incapacitated and is not able to do so. In the absence of this document, you may be required to hire legal counsel to represent you in a guardianship proceeding. This is a process in which you petition the court to become the legal guardian of your child.
The HIPAA Authorization is a document that allows your adult child to appoint an agent to obtain their medical records and information should they become incapacitated.
In certain situations, it may be appropriate for your adult child to execute a will and living will.
Reflecting back, I do not recall my parents ever being concerned about the above matters when I turned 18, do you? Of course, back then, HIPAA and FERPA did not exist.
So in conclusion, Happy 18th Birthday, Matthew! …Please review the following documents and sign here.
I hope you found this information useful! If you’d like more information, Cheri can be reached at (310) 798-7053 or [email protected].
