By Matthew N. Turko
Haile, Shaw & Pfaffenberger PA
Once a child attains the age of 18, under Florida law he or she is a legal adult. This would include the privilege of signing estate planning documents. Preparing some basic estate planning documents is usually the last thing on any client’s mind when a child is preparing to leave home for the first time to attend college. However, to provide peace of mind to a client in the event of various unfortunate situations that can and sometimes do occur, it is important that a client consider having his or her child sign some basic estate planning documents prior to leaving home. In the event of a health emergency for the child, this can alleviate some complications associated with such emergency because the child has provided a clear directive as to who is to make decisions for such child if the child is unable to do so.
First, the child should sign a complete set of healthcare advance directives appointing the parent or parents as healthcare agents to make healthcare decisions for the child if he or she cannot make such decisions. This would include signing a Designation of Health Care Surrogate, a Living Will and importantly a HIPAA Authorization. The Designation of Health Care Surrogate appoints an individual who is authorized to make decisions regarding medical care for the child in the event the child is unable to make such decisions. A Living Will appoints an individual with authority regarding end-of-life decisions and to carry out the child’s wishes. Since health information is protected as confidential under federal law, a HIPAA Authorization is very important for the parents to have in their favor so if there is a medical emergency the parents can access relevant health information and immediately communicate with the medical care professionals involved in the matter. These are three forms that all estate planning attorneys generally have their estate planning clients sign and they should also be put in place for any adult child of our clients.
Second, the child should have a Durable General Power of Attorney signed in favor of one or both parents. The average college student will not have substantial assets in his or her name. However, by signing a Durable General Power of Attorney, the child has enabled someone other than a child to manage any assets or other financial matters should this ever become necessary. For example, this would include common items such as terminating a rental agreement, paying outstanding bills, filing income tax returns and depositing checks.
Third, a child leaving home should consider signing a simple Last Will and Testament to at the very least appoint a person to act as personal representative and also name the beneficiaries of his or her estate. Most likely the child will not have substantial assets. The child may have a preference on naming the ultimate beneficiaries of his or her estate and his or her preference may vary from the default estate plan provided by Florida intestacy law. Under Florida intestacy law, assuming the child has no spouse or children, the parents would equally inherit such child’s assets. A Will is also important to appoint a personal representative to act on behalf of the child’s estate. This could be important in the event of a wrongful death action as the personal representative would be the party to bring a lawsuit and represent the estate’s interests in the lawsuit. Florida law also now has a statute addressing digital assets, such as social media accounts and e-mail accounts. In today’s environment, with the younger generation, it could be important to have a Will that includes digital asset provisions authorizing a personal representative to access such accounts after death for various reasons. This can be more complicated without a Will in place without proper digital asset authorizations.
Lastly, clients should confirm that any insurance policies and/or retirement accounts or other financial accounts that the child has in his or her name have appropriate beneficiary designations completed and are up to date. This is particularly important with insurance policies and retirement accounts which generally could default to the child’s estate in the event of death without a beneficiary designation and be potentially exposed to general creditor claims. As a result, any beneficiary designations should be confirmed to be completed and up to date.
A child leaving for college is an exciting time in a parent’s and the child’s life and a big first step to becoming an independent adult. Just as much as getting in place tuition payment plan, student housing, necessary school supplies and a student meal plan, a client should also have a child put in place a basic estate planning documents in the unlikely event of a health emergency or other disaster.
Matthew N. Turko practices in Wills, Trusts and Estates at the law firm of Haile Shaw & Pfaffenberger P.A. in North Palm Beach. Matt focuses his practice on estate planning, federal income and transfer tax issues, and probate and trust administration.