This week I attended an interesting wealth planning presentation and heard a nightmare story that I felt was important to share. Picture yourself in this situation:

You have a child who goes to college in another state, which is about a five-hour drive from your home. On your way home from a dinner party on Saturday night, you receive a call from a representative at the local hospital where your daughter goes to school. Apparently, she has been admitted to the hospital, and because you are listed on her insurance, they are calling you for some insurance information they need in order to treat her. Needless to say, you become quite agitated.

You urgently ask for some information, “What happened? Why was she admitted to the hospital? Is she okay?”

The response is frustrating, “Unfortunately, because your daughter is over the age of majority, the hospital is not permitted to discuss her case with you, sir.”

Growing more emotional, you ask if you can speak with her. The response to this question throws you over the brink into full-blown panic, “Unfortunately you cannot; she is currently incapacitated.”

What happens next is a complete nightmare – the longest five-hour car ride of your life. You drive all the way to the hospital, with absolutely no information about what has happened to your daughter and if she is going to be okay.

Unfortunately, this is a true story that really happened to a family. Fortunately, the daughter was fine, as it turned out her appendix had burst, so she needed an emergency (but routine) appendectomy. However, the panic and agitation the parents had to endure was torture.

The takeaway? Don’t lose your “power.” It is critical that all families regularly update all of their financial and estate planning documents, especially the medical and financial powers of attorney, which will enable loved ones to access information and make decisions for other family members who are suddenly incapacitated.

Although most families don’t think about executing these documents for their children, it is critical that these documents be in place for those who have reached the age of majority and don’t forget…we we talk about your “children”, we aren’t just thinking of your teenagers. If you have young adult children, they should have these documents as well.

Q. What steps could parents and young adults take to avoid a medical emergency like this?
A. A big percentage of parents and young adults miss the opportunity to establish a Durable Power of Attorney for Health Care and Health Care Directive. Most people don’t automatically think of the concept as applicable for younger people as they might for themselves or for an older adult. People tend to overlook its benefits for kids but once they turn 18, they are now an adult.

Q. What are the key parts of the form?
A. Your child will likely want to specify that you and your spouse are named “agent” so you can make decisions for them if he or she lacks “capacity” (competence to reason and deliberate) to make or communicate them in the future. If your child doesn’t live close by (ie away at college), consider having family members that may live closer added as alternates. Put signed copies on file with your primary health care provider, one in a safe place and maybe even consider one in the glove compartment of your child’s car.

Q. What about a Health Care Directive?
A. That’s generally part of the same form. Here the child can specify his or her wishes in advance about life-prolonging procedures if found to be persistently unconscious or at the end-stage of a serious incapacitating or terminal illness. This document also provides guidance and support to your Health Care Power of Attorney agent in case of emergency.

Q. What about a Financial Power of Attorney?
A. A financial power of attorney authorizes someone to manage your financial affairs if you’re unable to, due to incapacity, illness, or absence. It covers tasks like paying bills, managing investments, or handling property. While not urgent for all, it’s wise for those with assets, medical risks, or travel plans. It can be tailored to limit powers or duration, offering flexibility. It’s a simple, proactive step for peace of mind.

Q. What about a Will?
Similar to a Financial Power of Attorney, a Will is not urgent for all, but is wise for those with assets. If your child owns property (don’t forget, a car is property) or has financial assets, having a Will makes sense. For young adults, this is less important that Health Care and Financial Power of Attorney, but becomes more important as they accumulate assets.

Q. What else can school families do?
A. Communicating the importance of these matters to young adults can be challenging, but it is worth making every effort. For instance, parents should also fill out the HIPAA Privacy Authorization form, which authorizes disclosure of protected health information on your son or daughter to you if needed. This would include matters involving alcohol or drug abuse treatment, mental health records and communicable diseases like HIV and AIDS. Remember, the child has to sign the form as well.

Q. Do I need an attorney for the paperwork?
A. You can download the basic form off the state bar association of any state and complete the form yourself. There are also websites estate planning websites that will provide for free or a fee. While it’s best to have an experienced attorney-at-law to consult with in these matters, especially for other estate planning documents, you don’t need a lawyer to put this form into effect.

Finally, always consult with your CPA or attorney if you have further questions.