Top 10 Planning Issues to Consider for Protecting Your Kids through Their College Years
Some great information below that was sent to me.
A new school year causes many parents to renew focus on the well-being of their children, particularly those seeing their kids leave for college for the first time. John O. McManus – top AV-rated trusts & estates attorney and founding principal of Tri-State-Area-based McManus & Associates – shares free expert guidance on the…
Top 10 Planning Issues for Recently Emancipated Children (over 18) and Minors
1. Legal and medical risks for children upon reaching age 18, legal adulthood. What happens if they are in a car accident or are hospitalized? How can we access medical and school records?· Once your children are legal adults, you are no longer able to automatically make medical decisions on their behalf, access their medical records, or take any other action for their benefit if they are unable to do so.· Additionally, parents will not have automatic access to their child’s financial accounts if they are over the age of 18.· Adult children must consider completing a Health Care Proxy, Durable Power of Attorney, and an Authorization for Release of Protected Health Information to provide their parents with the authority to act with respect to their medical, legal, and financial needs if they are incapacitated or otherwise unable to handle their own affairs.2. Overseas travel and study abroad. What are the necessities when your child is overseas?· If your child is away from home in college or out of the country on a semester abroad expedient access to the child’s medical and financial records can become even more critical in a moment of urgent need· Colleges will not release a student’s medical records, even to parents, if the student is over the age of 18. This may be extremely detrimental to a child’s well-being in a physical or emotional medical emergency. Advance planning can facilitate communication between the foreign hospitals and parents.3. Upon reaching age 18, does your child require a will?· We believe that broadly the answer is no. Most young adults do not possess assets sufficient to merit the use of a Last Will and Testament.· However, if larger accounts have been inherited by an adult child or if the adult child owns shares in a family business, a Last Will and Testament may be a critical component in the family’s overall estate plan to avoid unintentional beneficiaries and estate tax implications.· The will should provide direction for a power of appointment to allow your child to appoint trust assets to descendants and/or a spouse.4. Your child is an adult. Should you appoint him or her as your representative in your incapacity planning?· Adult children may be the best choice to name as fiduciaries to make the parents’ medical and/or financial decisions.· They may be appointed in the documents to serve at a future date when a certain age is reached, such as 25.· Your child can be included in the documents at a younger age (as a teenager, for example), with authority to act at the age determined to be best (25, for example).5. Your child is an adult. Should you make outright gifts to them? What are the risks of these gifts and custodial accounts?· Outright gifts to adult children should not exceed a certain amount as outright gifts are exposed to attack and may deter your child from making his or her own way in the world.· Presently, $13,000 from each parent or grandparent can be transferred on an annual basis to each child and grandchild. Additionally, up to $5.0M can be transferred gift tax free to children and grandchildren.· A better way to make larger gifts to children is in lifetime trusts that will protect the assets against any unintended diversions or reversals (i.e. divorce, law suits, creditors, etc.) that a child may encounter, while still providing for the child’s needs and allow the child to maintain a certain quality of life.· We often recommend that a child serve as co-trustee at age 30 and sole trustee at age 40.6. Your 25-year-old (or younger) child is getting married. Should you review with them whether a prenuptial agreement is necessary to protect the family assets?· Having the discussion about a prenuptial agreement can be beneficial for both the parents and child who is about to be married. Clear financial foresight in advance of a wedding can be helpful to planning for a successful marriage.· Certain assets, which are intended to stay within the family, can be protected.· Significant work has been put into creating trusts for your children so that there is little risk of diversion, but a child can empty the trusts. Children should be well versed in the overall strategy to invest the assets in trust instead.7. Your child is under 18. What are the medical risks if you are unavailable?· In the event that the parents or guardians are unavailable and minor children require medical care, a hospital or doctor’s office will reject the treatment that the child needs, unless there is a clear risk of death.· In the past, care providers have been sued for wrongly treating children without the consent of the parents and now mandate formal written permission from a child’s parents if they are not present or cannot be contacted.· Someone local should be appointed to assist in getting your child admitted to the hospital.· In order to assure that minor children are treated properly and immediately, their Health Care Proxy and Authorization for Release of Protected Health Information will name representatives who will be able to (i) receive their critical medical information; and (ii) make medical decisions for them if the parents are unable to do so.· A set of the documents should be kept at the house, in a place that is easily accessible such as inside the kitchen cabinet door.8. Your child is under 18. What if both parents pass away or become incapacitated? What must a comprehensive plan to protect this child address in addition to appointing guardians?· The Wills we prepare provide comprehensive directions for the guardians that outline expectations and wishes for the minor child’s upbringing.· These instructions may include an advisory group to assist the guardians in making decisions and understanding the parents’ objectives and guidance regarding priorities for education, medical treatment, household support, and other important considerations.· A family mission statement will assist with direction for your children and may be critical if a child has special needs.9. Passports for children. What is the relevance of children of foreign nationality having a passport in the foreign jurisdiction? If your children are foreign born or going overseas, are passports current in the event of an emergency?· Always the best course of action will be to keep children’s passports current. Even expedited passports can take weeks to process. In the event of an emergency, it is critical that all children’s passports are current.· Without a legal guardian, a child will not be given a passport. A third party must be authorized in the absence of a legal guardian. This may be expedited by a signed and notarized document prepared by parents appointing this individual.· If children of foreign nationality living in the US must move abroad to live with the guardian named in the will, having a passport from the same country as the guardian can speed up the departure process since there will be no need to wait for a visa approval.· Finally, most airlines have policies regarding accompaniment of a minor for air travel.10. Your child is under 18 and your selected guardians reside overseas. What are the risks to getting them “home?”· NY will not appoint a non-US citizen guardian and will require a local co-guardian who can assist in moving the child abroad.· A foreign guardian can serve alone in NJ, CT, or FL; however, the courts will look at the best interest of a child and may request that a local co-guardian be named.· NJ will send paperwork for guardianship to the Embassy or Consulate office in the country where the named guardian resides. The testamentary guardian will have to sign the papers at the Embassy, and sole guardianship may be granted.· Additionally, a Last Will and Testament should name temporary guardians in the United States. The temporary guardians assist in the process of transferring the children overseas to be united with the appointed guardians. A temporary guardian can also be critical if the child is an infant or requires other forms of immediate care.· In order for the child to live abroad long-term, he or she will need to apply for a visa to the country of destination. Visa applications can require health screenings, background checks, and other time-consuming tasks that delay the child’s departure from the U.S. If the guardian named in the will cannot make it to the U.S. to take custody, a temporary local guardian can help navigate this process.