Carissa Giebel column: Young adults should look at estate planning
Most young adults, especially college students, never consider estate planning. In fact, many people don’t consider it until they either have children, or until they are planning for retirement.
Many young adults never consider estate planning because they don’t have much for assets. However, any person over the age of 18 is considered an adult under the law in Wisconsin, which is why some estate planning documents are needed for all people aged 18 and older.
Once someone reaches the age 18, parents no longer have decision making authority on behalf of the child. This means they cannot make financial or medical decisions, even if their child is unable to make them. That’s why it’s important for the young adults to do the necessary estate planning documents, appointing trusted individuals to make decisions on their behalf, in case something would happen where they are unable to make decisions themselves.
If an adult child is unable to make decisions, whether it be temporarily or permanently, medical professionals will likely deny the parents any information and not consult with them regarding the child’s situation. This is true even if the parents are supporting the child or paying their medical bills.
This is where a Health Care Power of Attorney would come into place. If the child had one prepared and signed prior to their condition, the medical professionals would consult with the agent named. The agent can be a parent, but it doesn’t have to be. It can be any trusted friend or family member. After the Health Care Power of Attorney is executed, give a copy to the child’s doctors to keep in their files.
The same is true for financial accounts and decisions. Parents are likely going to be denied access to any of the child’s financial accounts or assets, unless parents are joint owners on the account or listed as an agent.
To solve this potential concern, a Durable Power of Attorney can be done, naming a trusted person to manage assets. This can be structured two different ways. One way would make it effective right away when it’s signed, meaning the agent can act immediately. This typically works better for young adults, especially college students, so parents can access their accounts if need be when the child is out of town. This can also be structured so that it doesn’t become effective until incapacity, meaning the agent cannot act until incapacity.
If the powers of attorney are not prepared in advance, and an unfortunate situation arises, parents will likely have to petition the court for a guardianship proceeding, asking the court to give them decision-making authority. Not only can this take weeks to complete, but it can also be costly.
While it is not always necessary for a young adult to get a full estate plan, including a will and/or a trust, it is important to get the powers of attorney done, naming agents to act for financial or medical decisions.