About to turn 18? What an exciting time!
You already know that you can register to vote, get a tattoo, and purchase that lucky lottery ticket, but did you know that you also need to plan to manage your estate?
Even though it may not sound like the most glamorous task to do as soon as you become an adult, it is one of the most important measures you can take to protect yourself and your loved ones.
Let’s get into what you need to know.
What Legally Changes When You Turn 18?
Upon turning 18, your parents can no longer act on your financial behalf or control your healthcare decisions.
In other words, if you make a substantial financial decision (i.e., you decide it is a great idea to open up a bunch of credit cards and rack up debt), you are on the hook for payment.
Moreover, if you are faced with a medical condition or diagnosis, you are in charge of dictating when, if, and from whom you receive treatment.
Establishing Power of Attorney
One of the first steps towards planning your estate should be considering establishing a power of attorney (POA). The POA allows for a person you designate to make any business or financial decisions in the event of you becoming mentally or physically incompetent.
A POA may be used in a variety of circumstances. For example, a service member in the military may create this form to “release” control of their financial affairs while they are serving overseas. Or, a woman with a history of dementia in her family may assign a power of attorney in the event that she develops dementia at some point in her life.
The process of determining whether or not someone is incompetent varies from state to state. With that said, these legal documents allow you to define what you consider incapacitated to mean.
Health Care Power of Attorney
Much like a general Power of Attorney, a healthcare power of attorney is an important document to have in your comprehensive estate plan. The healthcare POA indicates the person responsible for making your medical decisions if you become unable to carry them out.
In practice, the designated healthcare POA works with a medical team (including doctors, surgeons, nurses, and even health insurance) to provide you with the care YOU would have wanted.
Your health care power of attorney will also carry out any end-of-life decisions on your behalf (i.e. if you have preferences for cremation or burial).
When you think of a living will or you make statements about what you would want to happen if you were on life support, this is the document you are discussing (or need to discuss).
HIPAA refers to the Health Insurance Portability and Accountability Act. It provides privacy over your medical information. When you turn 18, you have the right to confidentiality over these records.
However, signing a HIPAA release means you agree that, if medical care is needed, you allow for the release of information regarding your condition, location, and other vital information to designated individuals.
If you do not provide this release, medical personnel and hospitals cannot confirm or deny if you are a patient receiving care.
Plan Your Estate Now
Even though you are young, it is always wise to prepare and create a strategy in case the worst-case scenario strikes. You and your family both deserve that peace of mind.