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According to the Bureau of Labor Statistics, fewer adult children are moving out than ever before. Those who do are now more likely to move back in with their parents after a few years. That being said, a relatively high number of students still move away to attend college after graduating from high school. The Institute for College Access & Success states that about 570,000 new college students chose to attend out-of-state schools in 2020. While adult children often struggle when living independently for the first time, this situation can also be stressful for parents. As legal adults, their children are completely outside parental control and supervision for the first time. In this post, we discuss how parents may be able to use various estate planning tools to maintain control and achieve peace of mind during this transitional period.
The first thing parents should realize is that they cannot exert any control over their children once they become legal adults. Generally speaking, a child reaches legal adulthood at the age of 18. At this point, parents can no longer make medical or financial decisions on behalf of their adult children. The child can marry, join the armed forces, and take many other steps without parental permission.
That being said, certain estate planning tools may still provide parents with some degree of control after children leave home. This control could be crucial, especially in the early years of adulthood. During this period, children are much more prone to accidents, risky behavior, poor financial decisions, and other concerns. Although it might be unsettling to imagine young adults suffering catastrophic injuries in a car accident, sports game, or fight, this is a real possibility after children leave home.
A medical power of attorney is an obvious choice for parents concerned about their children leaving home. This essential document allows parents to make medical decisions on behalf of their children if they ever become incapacitated. There are endless examples of incapacitation, including comas, severe brain damage, schizophrenia, and much more. This mental incapacitation is usually associated with some kind of traumatic injury, such as an auto collision or sporting accident. That being said, young adults may also develop incapacitating mental health disorders at a young age – especially after experimenting with drugs. Cannabis-induced psychosis is a legitimate issue, and many other substances may permanently alter the mind of a young adult. Adult children are more likely to engage in risky behavior immediately after leaving home, whether it involves driving drunk, substance abuse, extreme sports, or fighting. Young males are more likely to engage in risky behavior compared to females.
A medical power of attorney identifies a parent as an “agent.” As an agent, the parent will have the authority to make medical decisions if their adult child becomes incapacitated. These decisions might involve high-risk brain surgeries, experimental treatments, removal from life support, and much more. Before they leave home, the child must identify the parent as their agent and sign the medical power of attorney document. If they do not consent, the parent cannot pressure them to sign in any way. If the adult child signs “under duress,” this essential document becomes invalid.
If a child leaves home with significant assets, parents may also want to consider a medical power of attorney. Like a medical power of attorney, this essential document identifies an “agent” to make decisions on behalf of the adult child if they become incapacitated. Instead of medical decisions, however, a financial power of attorney involves financial decisions.
This estate planning document may be particularly suitable if the adult child leaves home having just inherited significant assets. Alternatively, an adult child may have established a successful business before leaving home – perhaps as an eCommerce entrepreneur or a social media influencer. Some of these complex assets may include investments and corporations that require careful management. In certain cases, it may be necessary to liquidate (sell) certain assets in order to pay for the medical treatments of an incapacitated adult child. This highlights the benefit of having both financial and medical powers of attorney. Parents who are considering both types of essential documents may wish to speak with Rhodium Law, LLC for further guidance.
When an adult child leaves home, parents may wish to involve them in the estate planning process. The child can make their own medical decisions ahead of time with advance directives. Similar to a medical power of attorney, this estate planning document involves medical decisions. However, it allows the adult child to write down their own instructions for specific medical treatments rather than identifying an agent.
For example, an adult child can decide whether they want their organs donated to science if they pass away. They might state that they do not wish to receive certain treatments – perhaps due to religious or ethical concerns. In addition, an adult child might state how they want doctors to proceed if they ever fall into a “persistent vegetative state.” This might include removal from life support after a certain amount of time has passed. If an adult child makes this decision ahead of time, it can save their parents from the responsibility. This could potentially prevent feelings of regret, self-blame, and stress for the parents.
Although online research may provide broad guidance on essential documents and estate planning steps for children leaving home, each family is different. An adult child may have specific health concerns, or they might have much more wealth than the average person their age. Perhaps a child is leaving home immediately after inheriting a significant fortune. Whatever the case may be, families may wish to discuss their unique priorities and needs alongside experienced estate planning attorneys in Ohio.
An experienced estate planning attorney in Ohio may be able to help parents assess essential documents before the move-out date. Unlike online research, a consultation with a lawyer may give parents the opportunity to ask their own questions while receiving targeted guidance. To learn more about estate planning when children leave home, consider a consultation with Rhodium Law – and call (216) 699-8145 to get started.
