The Importance of Powers of Attorney for Young Adults
As an Advisor, the topics I help provide solutions to tend to go in cycles. There are times when I am helping clients rebalance their portfolio. After tax season, I often provide clients with recommendations regarding what they can do to improve next year’s tax efficiency. Many of my clients are currently in a phase where their children or grandchildren are getting ready for college or have recently started. This is an emotional transition for clients. The kids they helped teach walk, talk, and read, among many other things, are leaving the house for the first time. During this time parents and guardians are seeking peace of mind. One step toward achieving peace of mind is having your young adult establish powers of attorney (POA) once they turn 18 years old. At TCI, we provide resources to help clients safeguard the financial and medical wishes for themselves and their loved ones. However, it’s important to remember that TCI is not a law firm, and this blog should not be considered legal advice. By setting up POAs with your young adult, you’re helping provide essential protections for them and peace of mind for yourself.
Why Young Adults Need a Power of Attorney
There’s a common misconception that parents or guardians automatically have authority over their children in an emergency. However, once they turn 18, they are legally an adult and, in the eyes of the law, your relationship is different now. Even though your young adult is in their first year of college and may not feel like a “real” adult, you no longer have a say in their medical and financial matters. Despite many people seeing estate planning as a “someday” task, take the time to guide them through creating POAs or set up an appointment for them with your estate planning attorney. 41% of young adults between 18 and 34 have never discussed their estate plans with anyone. By doing this together, you’re teaching them how to be an independent, responsible adult. As you’re doing this, talk them through the “how” and “why” behind your decisions and have conversations around who they should pick and why. More than likely, it will be you, but remember it’s their choice.
Benefits of a POA: A Parent’s Perspective
Establishing a POA isn’t just for older adults or those with significant assets. By having a POA in place, your loved one designates someone they trust to have the legal authority to act on their behalf in medical and financial matters. With a properly executed POA, parents or guardians can:
- Get timely updates and information from hospitals, doctors, insurance companies, or other medical providers if their child is unresponsive, unconscious, or otherwise incapacitated due to injury, illness, or another medical crisis. Without a POA, parents or guardians may be blocked from accessing this critical information.
- Avoid costly, stressful, and time-consuming legal battles to obtain court-ordered guardianship or conservatorship over your young adult in an emergency or life-and-death situation.
- Quickly make potentially life-saving medical decisions on their child’s behalf, such as approving treatments, procedures, or transferring medical care.
- Directly handle billing, expenses, and financial support where it is urgently needed. This can be especially critical if rehabilitation or long-term care is required after a medical event.
- Ensure your young adults previously stated medical wishes and preferences are honored. This includes what treatments or interventions they do or do not want, if they are unable to speak for themselves due to incapacitation.
While no parent or guardian wants to consider these scenarios happening to their young adult, establishing a power of attorney can help provide invaluable protection and peace of mind when families need it most. Having these documents in place ensures the young adult’s wishes are implemented.
Starting the Conversation
The most challenging part of setting up a POA for your young adult is getting them excited to have conversations about estate planning. For many, thinking about medical emergencies can feel nerve-wracking and scary. Schedule time with your child to have an open and honest conversation about the “why” behind setting up a POA and to discuss their medical and financial preferences.
Stay open to what they have to say and remember that their preferences may not mirror your own. As a young adult they are still developing who they are, and this extends to their personal emergency medical care. At this stage, it is clearly no longer about teaching your young adult how to walk and read. Yet, these discussions are what will help make them well rounded adults. It should still be exciting that you are the one that gets to support them through that process.
Your TCI Team Can Help
Together, you can decide how to obtain the appropriate legal documents to cement their POA and other estate planning measures. Make sure your young adult’s preferences are being honored in their POA should an emergent situation arise by consulting with an estate planning attorney. TCI is not a law firm and we cannot provide you with legal advice. Nonetheless, many clients need lots of encouragement to start the estate planning process. If you need help, reach out to your TCI team and we can help you by:
- Finding an estate planning attorney who meets your unique needs.
- Sourcing alternate options if working with an attorney isn’t necessary for you and your child.
- Educating you and your child on the basics of the estate planning process, what needs to be included in your POA, and how to use it in an emergency.
- Ensuring the POA you create with your young adult protects them in the state in which they reside because some POAs are state-specific.
It’s beautiful watching your child grow into a young adult. It can also be scary to think that since they’re out of the house, you may now have some legal limitations. By helping them establish a POA you’re proactively addressing this. At TCI, we have a trusted network of estate planning attorneys and alternate POA specialists who work with parents and guardians and their young adults. Our goal is to help be your trusted resource to help protect your family. If you have questions about how to start estate planning with your young adult, reach out to your TCI team. Each of us is here to assist you and your loved ones in any way we can.