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Legal Documents and Advice for Young Adults
Many parents are not aware of important legal issues affecting their 18 to 21 years old children. Once children become “of age”, parents no longer have the same access to information and control over their children; they are considered adults in the eyes of the law for most purposes.
Proper planning for legal issues that can arise during this time becomes critical.
Here is a checklist of legal documents and issues for parents and young adults to consider:
- Durable Power of Attorney. Parents have no legal authority to act on behalf of their children who turned 18. A durable power of attorney can allow a parent to handle financial issues if the child becomes temporarily incapacitated. Designating the parent to act on behalf of the young adult, can eliminate the need to have a court appoint a guardian.
- Health Care Proxy and HIPPA Authorization. A young adult 18 or older can make his or her own health care decisions. A health care proxy can designate a parent to make medical decisions for the child in the event that the young adult becomes incapacitated and can allow the parent to have access to the child’s medical information. In addition to that, a HIPAA (The Health Insurance Portability and Accountability Ace of 1996) Authorization Form designates individuals who can obtain the child’s health information. Many colleges offer their own HIPAA forms for medical records from the college health center. It is also a good idea for your child to arrange to have his or her medical records sent to the college health center.
- Will and Trusts. For young adults who have significant assets, it is important to consider whether a Will or a Revocable Trust is needed. If a person dies without a will, the rules of intestacy determine how that person’s assets will be distributed. This may have unwanted estate planning consequences for the parents for instance so careful consideration should be given to this point.
- Health Insurance. College students who are 26 years old and under can be covered by their parents’ health insurance. It is a good idea that your child has a copy of their insurance card. Students are also usually covered by their parents’ property and casualty insurance. If the child is renting an apartment off campus, the lease may require that they obtain a separate insurance policy to cover the contents of the apartment.
If you have not discussed financial matters with your children, now is a good time to do so. Getting them used to the idea of bank accounts, credit cards, budgeting, credit monitoring and cyber security is an important piece of their education.
You may want to open a joint bank account with your child and add him or her as an authorized user on your own credit card as a good first step to establish their credit history.
If your child is working for the first time, they will need to file their tax returns promptly. Young adults with earned income can also start funding a Roth IRA, a very tax efficient way to save for retirement.
Your Ingalls advisor would be happy to discuss the appropriate planning for you and your child. A little prep work before your children head out to college can provide tremendous piece of mind.
The material is not to be reproduced or distributed to others without Ingalls & Snyder, LLC’s (“Ingalls” or the “Firm”) express written consent. This material is being provided for informational purposes and any opinions expressed in this material are only opinions at the time of writing. Nothing provided by Ingalls should be considered tax or legal advice, and clients should seek advice from their tax and legal professionals. Bridgehampton is a team at Ingalls & Snyder, LLC, an investment advisor registered with the Securities & Exchange Commission and a FINRA member broker dealer. More information including the firm’s Form ADV Brochure and Form CRS can be found at https://www.ingalls.net/importantinformation
The content provided herein is for informational purposes only. The statements are believed to be accurate at the time of writing, but tax laws may change. The statements provided do not contemplate each individuals unique financial circumstances. Therefore, you should consult a professional legal and tax advisor for your estate planning needs before taking action.
Ingalls & Snyder is a registered investment advisor and broker-dealer based in New York City. We provide investment management and related services to private clients and institutional investors.
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