A different kind of graduation present

Congratulations! It’s graduation season!

Before you get too misty-eyed wondering when your baby turned into the lovely young woman or man standing on stage getting a diploma, you may want to consider a different kind of graduation present for the new graduate.

An estate plan.

The hard, cold reality is that once your child turns 18, you have no legal right to access your child’s medical, financial or academic information unless your child has given you such powers in writing. If your child does not have a Durable Power of Attorney (DPOA), Health Care Proxy (HCP) and HIPAA Release granting such powers over such information, you may have a crisis on your hands if your child becomes seriously injured or incapacitated and cannot care for himself.

If your child is seriously injured or decides to study abroad, you would need a DPOA to make sure that his bank account is managed, the lease on his apartment is cancelled, get access to his mail if he forgets to change his address, deal with his car insurance, control his student loans, and otherwise control all those matters which may require his signature. The DPOA would also allow you to bring suit on your child’s behalf if he is seriously injured in an accident and is unable to direct a lawyer. The DPOA also should give explicit authority to access academic records, so that you can deal with the college or university. Without a DPOA, you will need a conservatorship from the Probate Court to manage an incapacitated child’s affairs, which is never a quick-and-easy process due to procedural requirements and the cutbacks in staff at the courthouses.

The HCP and HIPAA Release grant you access to your child’s health and medical insurance information. This access would be crucial if your child is seriously injured and unable to speak for himself. Without that access, you would be forced to seek temporary  guardianship in the Probate Court. Even though Massachusetts has an after-hours emergency system so that there is always a judge on call, precious time can be wasted while trying to get all the paperwork in place for a temporary guardianship.

And if (God forbid!) your child should die, having a basic will which nominates you as personal representative of his estate and leaves specific direction about to whom he may want to give his possessions.

The cost of a basic estate plan is usually modest, and well worth the peace of mind which it will give you once you drop off your child this fall at his dorm.

Are you sure you want to be a fiduciary?

I regularly counsel my clients to be careful about who they name as fiduciaries — personal representatives, trustees, attorneys-in-fact and health care agents. Many reflexively name a spouse. Some of my clients want to name their oldest child, thinking that this is “naturally” the role for that person. Others may want to name their favorite son or daughter.

Naming someone as your fiduciary is not doing them any favors — you are asking a loved one to take on what may be an time-consuming, thankless task — usually for no pay. I always tell my clients to talk to that person long before they ever sign the documents to be sure they are willing to take on the job.

I’ve learned from experience that sometimes does not happen.

Every estate planning and elder law attorney will sooner or later have a case where a named fiduciary elder turns out to be unsuitable for the task or simply did not want the job. That’s one reason why well-drafted estate planning documents name back-up fiduciaries. So what if you’re one of those reluctant or unwilling fiduciaries?

First,do you have difficult feelings about the person naming you? Be honest about this. No matter how well equipped you may be to handle the mechanics of the job, you may not be the right person if you harbor significant anger or resentment. This is particularly an issue where the person is still alive and you will have ongoing contact with him — for example where there is a familial history of alcoholism or emotional abuse by the parent. There is nothing shameful about admitting that you’re just not the right person for the job. Give yourself permission to say “no” if you believe you will not be able to remove your unresolved feelings from the tax at hand.

Second, understand what is being asked of you. Ask to see the document naming you as fiduciary and read it. Can you candidly say that you understand the demands which will be made of you? Do you have a good, unemotional, understanding of your parent’s situation and what the future may hold for her? Do you have the time and energy to do the job properly? If you understand the task and are truly able to do it, are you willing to identify and  delegate tasks to appropriate helpers?  Will you consult paid professionals to provide you with guidance and service as appropriate?

If you learn that a relative is thinking about estate planning, discuss your thoughts with her about who would be an appropriate fiduciary for them. If you don’t think you’re up for the task, say so. If there is no back-up and the relative no longer has capacity to nominate a new fiduciary, you may need to go to court to ask that someone else be named in your place.

Time for the Second Annual Get-Your-Graduate-to-Sign-A-Power-of-Attorney Lecture

Those of you who were reading my blog a year ago…. go have a cup of tea.

The rest of you…. pay attention.

There’s a good chance you know a kid who just turned or is about to turn 18. You may be attending her high school graduation in a few weeks. Guess what… that kid is or is about to become a legal adult. That means Mom and Dad have NO legal right to access her financial information, school records, or talk to her doctor.

So? You may shrug.

Well, what if there’s an emergency? What if Suzy is involved in a car crash and gets seriously injured? Who will have the right to deal with the auto insurer? Medical insurance? Sue the other driver? Tell the college that she’ll need to take a leave of absence? Unless Suzy has signed a durable power of attorney, a health care proxy, and a medical information (or HIPAA) release… no one. If Suzy’s injuries leave her in a coma, the hospital may not listen to the parents unless there’s a health care proxy in place — forcing them to go to court to seek a guardianship.

Or… what if Bobby is still in school and receiving special education services? Under federal law, the parent’s right to advocate for Bobby and approve the education plan dies at age 18 unless Bobby signs a power of attorney authorizing the parent to engage in such matters, Bobby is legally on his own and at a distinct disadvantage in negotiating for his schooling.

Most attorneys will prepare these documents for a modest fee. Just make sure that it gets done.

Denial

Incapacity and death are scary prospects for most of us. As an elder law attorney, I see the consequences of failing to cope with the fear. Not facing your fears and meeting with an elder law or estate planning attorney can result in a lot of stress for your family — and a lot of expenses for you and your family when I get hired to clean up the legal and financial mess that didn’t have to happen.

If you’re incapacitated and don’t have a durable power of attorney, someone will need to go to court for a conservatorship appointment in order to manage your finances. This can get pricey. Not only will there be legal fees and court costs, but the would-be conservator will need to get a surety bond. Depending on the amount of assets you have (aside from real estate), the cost of a surety bond can run from several hundred to several thousand dollars — every year. If your house needs to be sold or a mortgage obtained, there will be legal fees and court costs for that. If a trust needs to be set up to help manage your assets — yep, more legal fees and costs.

And let’s not forget the amount of time it can take from when the paperwork is filed to the day a court order is actually issued — often 8 to 10 weeks or more.

All this lost time, money and work… it’s all avoidable with a durable power of attorney.

They’re off to college! But can you help in case of emergency?

Great post in one of the blogs at boston.com about an commonly-overlooked issue. A parent’s ability to help their child with medical issues — like acting as an advocate in the event of an illness — ends when the child turns 18 unless the child has signed a health care proxy and HIPAA-compliant release for medical information. If these documents aren’t signed and on file at home, with your kid’s doctor and at the student health service, you may not be able to help your child get critical care in the event of a medical emergency.

Similarly, your child needs a durable power of attorney giving you legal authority to access her bank and credit card accounts and to make legal decisions. For example, if your child is seriously injured in an accident, you don’t want to have to go to court for a conservatorship just to sue the idiot who ran the ran the red light! The DPOA will allow you to help when help is needed most.