Parents, for most of you, these two “must-dos” for your young adult children probably never crossed your mind. A child becomes a “legal” adult in Alabama at age nineteen. Other states vary from age eighteen to twenty-one. Once a child crosses that legal threshold of child to adult, they need to:
- Sign an Advanced Directive for Healthcare. About three years ago, my wife ended up in the Intensive Care Unit (ICU) of a local hospital and when I asked the nurse about her status, her response was, “I cannot release any medical information unless she has a signed Living Will designating you as her agent.” Fortunately, this was not a problem for us and she made a full recovery but how many of you know that your children don’t have a Living Will designating you or someone else to receive information or help make decisions should they become suddenly incompetent due to an accident or illness? This non-disclosure by physicians and hospitals is a result of privacy laws enacted a number of years ago. The good news is that the solution to this potential problem is both easy and inexpensive. Most states have drawn model forms that you can download for free. Once signed and properly witnessed you are all set. Be sure to have multiple copies and make certain the person designated as the child’s agent to receive information and make medical decisions has a readily available copy. I’m guessing a smart phone photo will do in a pinch but know where the original copy is kept. For Alabama’s downloadable form visit the Resource Center at Welchgroup.com; then click on ‘Links’; then ‘Living Will- State of Alabama’.
- Sign a Durable Power of Attorney (POA). If your young adult child has any assets, the POA designates his or her agent for all financial matters. Without this document, someone (you?) must hire an attorney, go to court and have the court appoint an agent for the child’s financial matters. As you might imagine, this can be time-consuming and expensive. You can get an on-line sample POA or use an on-line service such as LegalZoom.com but I strongly recommend you use a local attorney. In Alabama, the Alabama Legislature approved a model POA in January 2012 that should be followed.
If an adult child were to die suddenly, who would receive his or her property? If there is no will, state law determines all of these decisions. In Alabama, if there are no children, the assets would go to the parents equally. If the child is married, the first $100,000 goes to the surviving spouse and the balance is split between the child’s parents. If the adult child is married and has children, the first $50,000 goes to the surviving spouse and the balance is split between the spouse and minor children. And since minors cannot legally receive property, a court will decide who is responsible for supervising and managing those assets. Without a will, the courts will decide who would be the guardian of minor children if there was an untimely death. Drawing a will can address all of these issues. Depending on complexity, drawing a will can cost under $300 or several thousand dollars.
As parents we all think that our nineteen or twenty-something children will all live to a ripe old age but you only have to scan the daily news to realize that’s not always the case. The wise choice is to make certain your young adult children have these basic estate documents in place.