by Dana Bookbinder, Esq.~While we tend to think that estate planning documents are necessary for older individuals, they are equally as critical to have in place for younger individuals. Once a child reaches 18 years of age, a parent no longer has the legal authority to sign on his behalf. If the child is unable to handle his own financial transactions or if he becomes injured and is unable to communicate with his physicians, his parents (or other relatives) will encounter difficulty trying to assist him with his affairs.
A Power of Attorney for financial and legal matters and an Advance Health Care Directive such as a Living Will can give parents or (other relatives) legal authority to act on behalf of an individual over age 18 with regard to health care, legal or financial decisions. As an Elder and Disability Law attorney, I have discussed this often overlooked issue with Nancy Alterman, a clinical instructor for medical students at the New Jersey Institute for Successful Aging located in Stratford.
Nancy understands that while young people may not have many assets, they still are exposed to a huge risk that they may need medical treatment at some point and would need someone to not only communicate their health care wishes to a physician but to sign financial or legal documentation for them. College students generally have bank accounts and often have student loans. They may have accounts through online companies that would need to be addressed in the event the student was incapacitated. Through a General Durable Power of Attorney, a student or other individual can appoint a trusted family member, friend, or advisor as his or her agent to sign legal, business or financial paperwork on her behalf.
If a college student were to become incapacitated and unable to finish school, without a General Durable Power of Attorney, her parent would be unable to renegotiate her daughter’s student loans, terminate her apartment lease or sublet her apartment, or transfer assets from her daughter’s bank account to her name. Likewise, the parent would be unable to put a hold on her daughter’s car insurance until her daughter recovered. These situations would all be addressed in a General Durable Power of Attorney. Of course, parents should necessarily sign these documents as well so that their children (or other individuals that they may choose to appoint) may act on their behalf in the event of incapacity.
As college bound and other individuals over age 18 must sign a Power of Attorney to address legal and financial issues, those over age 18 also need a Health Care Power of Attorney. “The [Health Care] Power of Attorney works for acute illness and chronic disease, and it also works for end of life,” Nancy points out, “It covers more situations than a Living Will.” As opposed to a Living Will, which simply directs how an individual’s medical care should be handled in the event that individual suffers from a terminal illness or is unconscious without any reasonable expectation of regaining any meaningful quality of life, the Health Care Power of Attorney is more versatile because it appoints an individual to communicate with a doctor on behalf of a patient who is unconscious or otherwise unable to communicate with his or her own physician. My preference for planning is to combine a Living Will end of life directive with a Durable Health Care Power of Attorney into one Advance Health Care Directive.
One reason to appoint a health care representative according to Nancy is that medical technology itself constantly evolves and is difficult to keep up with. Therefore, it is difficult for an individual to anticipate how her health care would be handled in an end of life situation. Another reason that this type of document is especially critical for a young person because, as Nancy says, “kids do risky things – they surf, they hike, they bungee jump, they ride motorcycles. That’s why at 18 they need a Health Care Power of Attorney.”
Signing a Power of Attorney (for either financial or health care matters) does not limit the signor’s legal rights to act on her own behalf but does give another individual or individuals the legal authority carry out transactions and obtain information, which is critical if the signor ever becomes incapacitated. If the signor later recovers and is able to handle her own affairs, she can simply act on her own behalf regardless of having a Power of Attorney in place.
With back to school around the corner and young adults packing their bags, families need to discuss these legal planning documents as a necessary part of leaving the nest and entering adulthood.