How To Divide Your Assets Among Children: What's Really "Fair"?

“That’s not fair!” What parent of youngsters hasn't heard that countless times? It's a complaint that doesn't necessarily vanish when children are adults. In fact, depending on how they feel they've been treated in your estate plan, your kids may be complaining about unfairness even after you are gone, to the detriment of their relationship with one another.

 

Is equal always fair? How can you avoid playing favorites in your estate plan? The most obvious approach is to split everything equally. But suppose your children's circumstances are vastly different? In those cases, treating your children "equally" in your estate plan may not necessarily be the same as treating them "fairly." Here are just a few situations when dividing everything equally may not be the best solution:

• Scenario 1: One child is far more successful financially. Example: Child A is making a killing on Wall Street as an investment banker. Child B, just as hardworking, has made teaching high school English his life’s work. If you split your assets “equally,” B may feel slighted, and miss out on money he could legitimately put to good use. If you give the financier less, he may feel rejected and punished for being successful, despite the fact that he does not need the money.

• Scenario 2: Child A is fiscally responsible. Child B makes bad financial decisions and seems always to be in dire financial straits. B may be immature, or may have a drug of mental health issue. You know that if A gets his inheritance as a lump sum up front, he'll manage it wisely. But you hesitate to give B his inheritance all at once, and would prefer to put it in trust so that the trustee has oversight over how it is used. Will B understand why he is being treated differently? Maybe. Will he resent his sibling who is getting his inheritance up front? Quite possibly.

• Scenario 3: Child A is healthy, but Child B has a disability or lifelong medical issues. Depending on B’s circumstances, you may want to leave him more than you leave A. If you expect B will need federal benefits in the future, you may want to put B’s funds in a special needs trust. Despite the unequal treatment, the need for this arrangement is likely to be understood by both children. But that does not eliminate the issue of who gets to manage child B's trust. Will your healthy child want to be his brother's or sister's keeper, or consider it a burden?

• Scenario 4: Child A has worked since the teenage years, put himself through school and never asked you for a penny. On the other hand, you gave Child B $200,000 for college tuition and room and board, and you recently gave him $50,000 as a down payment for a home. Splitting your assets equally at death between the two of them might be great for B, but is it really "fair"? Instead of equal distributions, you may want to consider the gifts you’ve made to B over the years as a kind of early inheritance, and deduct that amount from what you are leaving B when you pass away. 

• Scenario 5: Over the years Child A has been caring for you, taking you to your doctors' appointments, checking up on you by phone and in person, helping you with your paperwork and with other everyday matters. Child B is no busier than A and lives just as close, but rarely lifts a finger to help. You don't know if A resents B, but you wouldn't be surprised if he does. Is an equal division of your assets between the two really fair, you wonder? How will this play out between the two if you reward A for his efforts by giving him more? 

What are your alternatives? When they were little, all you had to do was split the cookie equally, and problem solved. It's not that easy now. 

How to distribute assets to children with different needs and histories while trying to be even-handed can be a vexing problem. Some parents, unable to find a “perfect” solution, will continuously delay making a plan or never create one, letting the State of Florida's intestacy laws determine who gets what. That will result in each child getting an equal share - but doesn't solve the potential problem of one child feeling resentful in relation to siblings.

Our job as your Florida estate planning lawyers is to help you formulate a reasonable plan that you can live with (and die in peace with), and that your kids are likely to find "fair." Obviously, there is no one solution suitable for every family. We will sit down with you to explore in detail your finances, family dynamics, family history, and your goals. 

 
If you decide not to split everything equally, it is usually a good idea to tell your children about the decision in advance and explain the reasoning behind your decision, so they are not blindsided later on. You should also make brief mention of your reasons in your estate plan. This can go a long way towards fostering a good relationship among your children after your passing - and could potentially even prevent a lawsuit against your estate from an angry child who feels "That's not fair!"

What Can You Do If You're Denied Visitation With An Incapacitated Loved One?

Recent news is replete with stories about spouses, guardians and caregivers accused of refusing to allow family members to visit an incapacitated loved one. These stories have made headlines because they involved celebrities. Among them were disc jockey Casey Kasem and actor Peter Falk. Of course, the problem is not confined to celebrity families. When it happens to "ordinary" people, the stories just don't make headlines.

The most recent high-profile case is that of Glen Campbell, who died from Alzheimer's Disease in 2017. His children from a prior marriage allege that their stepmother Kim, Campbell's wife, did not allow them to see their ailing father. Son Travis said he learned she had moved his father from California and into a Tennessee assisted living facility only when he heard it on the news. Kim denies his allegation. She has said Travis was an absentee son who had not visited his father in 20 years. She told Inside Edition: "I never denied them a visit, ever. They never ever called me to ask how he was doing... It's a nightmare to have people on the internet threatening to kill you because they think you're this horrible person who wouldn't let people visit, which is totally false."


Whomever you believe, the Campbell family's conflict spurred Tennessee to pass legislation providing legal recourse to family members denied visitation with an ailing family member. "If there had been a law in effect," Travis says, "I would have had the most precious gift of all - time with my father."

Peter Falk's daughter has established the  Catherine Falk Organization that advocates for laws protecting the rights of family to visit incapacitated loved ones. Eleven states - unfortunately, not yet Florida - have adopted visitation laws. Surely more will do so as the population ages and the problem becomes more widespread. Below is a graphic from the Pew report showing the states that currently have visitation laws on the books.

Parents of Minor Children - Make These Plans for Your Peace of Mind

Sara Hankins made sad headlines recently. The Illinois mother of four was diagnosed last year with Lou Gehrig's Disease, and lost her life on March 13, 2017. She was just 36. Her primary concern during her last months was not herself, but her children. Who would care for them?

If you have young children, planning for your death or incapacity is probably the last thing on your mind. You are busy thinking about the good things ahead, carpooling, helping with homework, coaching soccer. But as Sara Hankins' story shows us, life can be unpredictable. And while she had several months to plan for her children's future, tragedy sometimes strikes without warning, on the highway or as a result of some medical catastrophe. As a loving parent of a minor, it is important to make plans so that your child is protected, no matter what the future holds. 

Many parents with minor children are short on financial resources. However, you need not be wealthy to put a plan in place, nor does it need to be overly complicated. Here are the key elements of a basic plan to protect your minor children. 



Create a Health Care Surrogate for Your Child

Even when you are alive and well, your child may become ill when you are not available to talk with his/her doctors and decide on treatment. You could be out of town for work, for example. Or you might be ill or incapacitated. Florida Statute 765.2035 permits you to create a "Designation of a Health Care Surrogate of a Minor" authorizing someone you know and trust to make those decisions in your absence. You should name a back-up surrogate in the event your first choice cannot serve. 

Frequently clients name several surrogates, giving any one of them the authorization to act. For example, your child may have two sets of grandparents or perhaps a number of other relatives who watch your child, and you would want any one of them to be able to make your child's decisions if you are not available. 

You should also be sure that your surrogate form contains a HIPAA release. This gives permission to your child's medical providers to release confidential information to your authorized surrogates. 

If there are two parents, both parents should execute the same instrument. 



Your Last Will and Testament

Your will must conform to Florida law and be properly drafted and executed with all the formalities required by the state. I caution anyone against using pre-printed forms or online resources. These resources come with a warning denying liability for mistakes. See a competent estate planning attorney to make sure it's done right. Your will should have certain elements that provide protections for your child, as noted below.

Name a "Guardian of the Person" for Your Child

If you pass away, The Florida Probate Court will choose a guardian for your child, based on what it decides is in your child's best interest. But you can let the court know your preference for guardian by naming a "Guardian of the Person." You can do this only one way: through a provision in your will. Your will must be properly drafted and executed according to Florida law.  The Probate Court will generally honor your wishes, unless the guardian you have nominated appears grossly unfit or is unable to serve at that point in time.

There are many issues to consider when deciding on a guardian. Although grandparents may seem the logical choice, their age and ability to handle the physical and mental challenges of raising children must be considered. A prospective guardian's moral and religious views may be important to you, as well as where the potential guardian resides, in order to minimize any further disruption to your child's life. Find out if the person you wish to name actually wants the job, and be sure to name backup guardians in the event your first choice cannot serve.

If there are two parents, each should have his or her own will, obviously naming the other as guardian. Each parent should also include back-up guardians in his/her will, in the event both parents are deceased. It's best if the parents name the same successor guardian(s).



Name a "Trustee of the Property" for Your Child
 
Your will should also have a provision naming a "Trustee of the Property" for your child. The trustee will manage your child's inheritance for your child's benefit, until the age at which you authorize your child to receive the funds. 

If you fail to designate a trustee, the Probate Court will appoint a Guardian of the Child's Property. Then the child will receive his/her money upon reaching majority age. Most parents do not want their children to receive their inheritance at 18 or 21, preferring instead a somewhat later age, when the child may be more fiscally responsible. Naming a trustee allows you to achieve that goal.  

You should name backups in the event your designated trustee cannot serve.  The trustee of the property may be the same individual you have named as guardian of the person, but need not be. 

Having limited financial resources currently does not detract from the need for a trustee. If you pass away, there may be life insurance proceeds to be managed, or a lawsuit related to your death or incapacity may cause a large sum to flow into your estate.

 

More Then One Child? Create a Common Pot Trust 

If you have more than one child, we usually recommend adding a clause in your will that requires the creation of a Common Pot Trust upon the death of the parents. 

If there are two parents, each should have his/her own will containing this clause. The will usually indicates that the parents leave everything to each other, but if they both die, the estate will pass to the Common Pot Trust.

The Common Pot Trust will hold your children's money. All the children will be beneficiaries, with your trustee having discretion over how the funds will be used, based on each child's unfolding needs. This is what we do as parents: we strive to give each child what he/she needs and do not keep a ledger to equalize expenditures. For example, one child may require expensive orthodontics and another may not. One child may be a straight A student and another may need tutoring to keep up. One child may get a scholarship for college and another may need parental help for tuition. The trustee of the Common Pot Trust should have the same latitude as you have to use the funds as he/she sees fit, without having to make things "equal."

Usually, the trust will contain language directing the trustee to terminate the trust when the youngest child attains a given age. At that time, the trustee will divide any remaining funds equally among your children.  

Review Your Beneficiary Designations

When you have children, it's time to review your beneficiary designations. If you are married, your spouse may be the death beneficiary. If not, it will probably be your children, or they will be the contingent beneficiaries if your spouse predeceases you. Items to look at include your IRA, 401K, bank account, brokerage accounts, and of course, life insurance policies. 

If your children are minors, do not name them as beneficiaries. If you do, the court will create a guardianship for them and select a guardian to hold the money they have inherited. By law, your child will receive the funds when he reaches majority age, and many children are too immature at that point to prudently handle a lump sum of money. It is preferable to require any money your child receives through a beneficiary designation to be managed by the Trustee of the Property you have named in your will.

And for You, the Parents

Who will handle YOUR affairs if you become incapacitated? Who will continue to pay your bills, or make your medical decisions? Every adult, parent or not, should have:  

• A Durable Power of Attorney: This allows you to name someone who can handle your finances should you be unable to do so yourself. You should also name backups.
  
• A Health Care Surrogate: This is like the Durable Power of Attorney, but the person named is authorized to make your health care decisions. You should also designate backups in case your named surrogate cannot serve. Also be sure that the document contains a HIPAA release so that your surrogate can get confidential information from your medical providers, pharmacies, health insurance company, etc.

Parents can derive great peace of mind by putting these plans in order. You will know that if life takes an unwelcome turn, you have a Plan B that protects your children now and in the future.

Parents of children with intellectual disabilities should make sure their child's IQ is tested before age 18

Important alert for parents of special needs children with intellectual disabilities: Make sure your child is IQ tested before age 18. 

First, some background: Florida's  Agency for Persons with Disabilities determines if an individual with a disability is eligible for a Medicaid waiver. A Medicaid waiver can permit your special needs child to receive community-based assistance and avoid institutional living. Unfortunately, securing a waiver has never been a walk in the park. According to a recent Miami Herald article, thousands are on the waiting list - and it can take years to get off it.

  

The applicant's IQ test score is one of the factors used to determine waiver eligibility. The applicant's intellectual disability must have developed before age 18. Thus, in order to qualify for a Medicaid waiver, your child will need to have an IQ test administered at age 17 or younger. (In contrast to the Social Security Administration, which requires the test to be administered before age 22.)

Due to budget cuts, Florida public schools no longer routinely IQ test students suspected of intellectual disabilities. Therefore, we recommend that if you have a child with a suspected intellectual disability, make sure he is IQ tested before age 18. Private testing is available and generally costs between $1,000 - $2,000.  Health insurance does not usually cover such testing, but you have nothing to lose by making the case with your insurance company.

Parents and grandparents of special needs children naturally have many questions about how to best plan for the child's ongoing welfare and care. Contact The Karp Law Firm for assistance.

Estate planning with Generation Z in mind: these are not your "typical teens"

Estate planning is not just about money and taxes. It's about the people you love: Their character, their values, their hopes, your hopes for them. These things matter when you are deciding how you want your assets distributed, and who you feel confident relying on to perform various jobs for you.


It's well know that each generation tends to have its own character traits. The Baby Boomers and the Millennials have been widely studied. Now, it is Generation Z's turn under the microscope. These are the teens and young adults in your family, born between the mid-1990s and the first decade of the 2000's: the children of the Millennials and the grandchildren of the Baby Boomers.


While we tend to associate teenagers with irresponsible behavior, the typical Generation Z-er is turning that notion on its head. In a 2015 J. Walter Thompson Innovation Group Study, 1,000 teens between the ages of 12 and 19 were surveyed. Like those raised during or shortly after the Great Depression, Generation Z-ers have grown up in a world of massive economic and political turbulence, which seems to have made them keenly aware of the importance of financial security, and more mature relative to earlier generations of teens. Eighty-three percent of the study respondents said it is important to start saving for the future, now. Write the researchers: "Unlike Millennials, Generation Z-ers have grown up in tough times, and, if anything, have watched Millennials and learned from their mistakes. They know education needs to be active rather than passive and that unemployment is a real risk." Gen Z-ers are generally ambitious and entrepreneurial, too: A 2014 High School Careers study from Millennial Branding reveals that 63% hope to start their own business rather than work for someone else.


No doubt there is still plenty of foolish behavior to be found among today's teens, but as a group, they are more responsible and sober-minded than the teens that came before them. In their age bracket, smoking, illegal drug and alcohol use, and teenage pregnancy are at the lowest levels in generations. That's good news for everyone in many respects. It certainly makes estate planning easier when you don't have to figure out of or how to provide for a loved one who has a drug problem or a track record of poor money management!


Another point I unearthed in my reading about Generation Z is that they are the first truly digital generation. Parents and grandparents must recognize that today's teens have never known a world without computers and the internet, and that has greatly impacted the way they interact with each other - and with us. If you are wondering why your teenage grandchild has yet to respond to the email you sent last week, you've already discovered that Generation Z-ers do not much care for email. Nor do they make phone calls, leave voice messages or listen to them. They consider all of that an inefficient waste of time.  What do they do? They text, directly or via social media. A 2012 Pew Research Center study showed that 77% of teens had smartphones, and the percentage is probably higher now. So whether you live down the block or across the country from the teenager in your family, texting him/her (but not too much!) is probably the way to go. 


In my last post I made the point that it's unrealistic to wait to do one's estate planning until life is stable - because change is the only constant. Our finances and family circumstances, our health status, tax laws and other laws are always in flux. And now, Generation Z is showing us that everything we thought we knew about teenagers isn't set in stone, either!

Change in Florida Health Care Surrogate Law: What It Means for You

Florida Health Care Surrogate Statutes have changed. The creation of Florida Statute 765.2035, and the changes to Florida Statute 765.202, became effective October 1, 2015. The change is very important for those with minor children. However, even those who do not have minor children may be impacted and should determine whether any action is needed. Below I provide the facts and recommendations:

If you have minor children

 

Florida has never had a law specifically authorizing the parent of a minor child to designate a competent adult to serve as the minor's health care decision maker. Obviously many parents want to name someone for this job, should the parent be unavailable. For this purpose, in the past The Karp Law Firm drafted a document in which our clients empowered a health care decision-maker for their minor child. Without going into the finer legal points, we believe that legal instrument has a firm basis in common law - but as noted above, no specific statutory authority. 

Now, Statute 765.2035 has been created, giving parents of a minor child the specific authority to create a written instrument called a Designation of a Health Care Surrogate for a Minor. If you are the parent or guardian of a minor child, you will want to create such a document in order to protect your child. Contact The Karp Law Firm for assistance.

  If you do not have minor children

 

Florida Health Care Surrogate Statute 765.202 provides one of two methods by which a Florida resident may empower someone to make health care decisions for him/her should incapacity strike. (The other method, the Health Care Power of Attorney, is the method The Karp Law Firm uses for clients.) Whether you are affected by the changes in the surrogate law will be determined by what type of documents you presently have, if any, as well as when they were drafted.

 

Until now, the Florida Health Care Surrogate statute allowed you to empower your health care surrogate to make decisions only if you were determined to be incapacitated. Additionally, the statute did not provide a legal basis for your surrogate to get your HIIPAA-privileged information from your health care providers.

Now, the statute has been modified in two ways:

• First, you can authorize your surrogate to make health care decisions on your behalf even if no determination of incapacity has been made.

• Second, you can authorize your surrogate to have immediate access to your medical information that would otherwise be confidential under federal HIPAA law.

Actions to be considered now:

• Clients of The Karp Law Firm for whom we prepared a Health Care Power of Attorney in 2004 or later: You need not take any steps. Here is why: First, it is unlikely that you would want to authorize a surrogate to make your medical decisions prior to your incapacity. Second, if you executed the Health Care Power of Attorney we created for you in 2004 or later, it has a HIPAA waiver incorporated into it that gives your agent immediate authority to receive your confidential medical information. Thus, you will gain nothing from creating a Health Care Surrogate - unless for some reason you want to give immediate authority to someone to make your health care decisions.

• Clients of our law firm for whom we prepared a Health Care Power of Attorney prior to 2004, and who have not had their document updated since then:  Changes may need to be made to ensure your Health Care Power of Attorney complies with HIPAA laws. Contact us for assistance.

• Individuals who are NOT clients of the Karp Law Firm:  Our firm can assist you. You should have your documents reviewed to ensure that they allow your decision-makers to have immediate access to HIPAA-privileged information. Contact us here.

 

Read more about the Florida Health Care Power of Attorney, Health Care Surrogate, Living Wills and other advance directives here.  

Read the Florida Health Care Surrogate Statute here. 

Domestic partners who marry can still achieve estate planning goals

If you are in a domestic partnership and have employer-sponsored health coverage or other employer-sponsored benefits for your partner, stay alert to the changing legal landscape. Many companies may phase out coverage for domestic partnerships. You may need to take steps - including marriage - in order to ensure your partner's continuing benefits.

Domestic partnership contracts can be useful for unmarried couples, both opposite-sex and same-sex, who wish to avail themselves of a partner's employer-sponsored benefits, such as health insurance. Many couples opt out of marriage and choose domestic partnerships for estate planning purposes: they want to protect the inheritance of children from a prior marriage. And of course, until June's Supreme Court ruling, same-sex couples did not even have the option of marriage.

Two thirds of Fortune 500 companies provide domestic partner benefits to same-sex couples, and of those, 62% also cover same-sex couples, according to the Human Rights Campaign. Many public employers also recognize domestic partnerships, including Palm Beach County and many states.  

Now, in light of the Supreme Court decision legalizing same-sex marriage, some employers that in the past offered domestic partner benefits are re-thinking their policies. For example, Delta Airlines, Corning and Verizon have announced they will no longer provide domestic partnership benefits, and have given their employees a grace period in which to marry, or lose benefits. Companies that have traditionally extended domestic partner benefits only to same-sex couples are considering dropping domestic partner benefits altogether.

Every employer is different, so be sure to inquire about your company's current policy. If you wish to marry now but have concerns about the estate planning ramifications, meet with an experienced estate planning attorney. A prenuptial agreement in which your spouse waives his/her right to the elective share and marital home, as well as other strategies, can be explored, giving you the freedom to marry while still meeting your estate planning goals.

Columbo's daughter does just one more thing for dad: The Peter Falk Bill

Actor Peter Falk is best known for having portrayed Columbo in the TV series of the same name. The crumpled, crackerjack detective's interviews with murder suspects always concluded with his puzzled statement, "Oh... just one more thing..." That was the "gotcha" moment when the smug suspect and audience alike knew Columbo had nailed the killer.

Now Falk's daughter is doing "one more thing" in honor of her father: Spearheading efforts to give adult children greater rights to visit ailing parents and to get information about their status.

When Catherine was five, Falk divorced her mother. He and Catherine continued to enjoy a close relationship. When in 2008 Falk began to suffer with dementia, his second wife, Shera, made it difficult for Catherine to visit her father and did not give her updates on his health. The situation was similar to what I told you unfolded in the families of the late Mickey Rooney, Casey Kasem, and now, Glen Campbell. 

During his period of incapacity, Catherine went to court in California. At great cost, she tried to get guardianship over her father. She learned then that children have few rights in this regard. The court instructed Shera to allow Catherine to visit her father, but Shera did not fully comply. In 2011, Falk passed away at age 83. Shera did not notify Catherine of her father's death; she heard about it from the media. Nor did she tell Catherine about her father's burial, or even his final resting place.

To prevent other adult children and their parents from enduring a similar experience, Catherine is promoting legislation to expand children's rights with respect to incapacitated parents. "There's no legal recourse that adult children have currently that allows them to get any visitation to their parents," says Falk. "They're isolated, and isolation means elder abuse. We need a law to protect us and to protect our parents so that we can have a relationship in their final years and days of their life."

As a result of her efforts, California is considering a bill - the Peter Falk Bill - that would recognize a child's right to visit an incapacitated parent. There is movement in other states to introduce similar bills. Here, from the Catherine Falk Organization website, are the provisions in the California bill. (Note that in that state, the word "conservatorship" is used instead of "guardianship"):
   

(a)  A conservator shall have the duty to keep the parents and adult children of a conservatee reasonably informed regarding the health of the conservatee.  A conservator must provide notice within 24 hours to any parent or adult child of the conservatee of any hospitalization or death of the conservatee.

(b)  Parents and children of conservatees have a right to reasonable visitation of the conservatee.  A conservatee shall not reject visitation made upon reasonable request unless the conservatee determines that visitation would be harmful to the conservatee.

(c) Any parent or child of a conservatee may bring a petition to enforce the right of visitation in the Court that appointed the conservator.  Such a petition may be brought in conjunction with a petition for appointment of a conservator.

(d) The court shall grant the petition for visitation unless the court finds, by clear and convincing evidence, that visitation would be harmful to the conservatee.  The court may place any reasonable restrictions on such visitation that it determines to be in the best interests of the conservatee.

(e) If the court finds that a conservator rejects a reasonable request for visitation, the court shall award the petitioner his or her costs, including reasonable attorney’s fees, unless the court finds that the conservator acted with a good faith belief that visitation would be harmful to the conservatee.

Further, the Proposed Bill would require cemeteries to open their records regarding interments to the public in order to allow persons to locate the graves of loved ones.

Have you had experiences similar to Catherine Falk's? Tell us your thoughts. Do you think similar laws are needed in Florida? 

Documents your 18-year-old needs

Has your child turned 18? Then he's an adult, says the law - even if he's still on your insurance plan, even if you're paying his tuition, even if he's living in your house and you're doing his laundry. From a legal perspective, your parental rights have terminated. That means that if he experiences a medical emergency, you may not be able to help or even get information about his condition - unless he has given you the authority to do so.

Why? Privacy laws. Two come into play here: The first is HIPAA, the Health Insurance Portability and Accountability Act, which limits those to whom health care providers can release data. The second is FERPA, the Family Educational Rights and Privacy Act, which restricts the information a school can release about an adult student.

Adults are entitled to their privacy, of course. And nobody wants to discourage an 18-year old from seeing a doctor or visiting the college infirmary because he's afraid mom and dad will find out about his personal life. On the other hand, most parents want to be there in the event of a child's health emergency, without having to go to court to get a guardianship over their child. And in my experience, once a young adult understands how the law works and its ramifications, he/she too wants the parent to be able to assist in the event of emergency.

There are numerous examples of well-intentioned privacy rules gone awry. Consider one incident reported by Consumer Reports in its 8/26/14 article, "Will You Be Able to Help Your Child in A Medical Emergency? Sheri Warsh, an Illinois resident and mother of a University of Michigan student, learned that her son had been rushed to the hospital when her son's roommate contacted her. (The hospital did not contact her.) In a panic, Warsh phoned the hospital to find out what was going on, but was rebuffed by the person who took her call. "She told me I had no right to talk to the doctor," Warsh says. Can you imagine how you would feel if this was your child? Fortunately, her son recovered.

 

Another instance is reported by Deborah Jacobs in a Wall Street Journal article of 8/15/14. Alex Franc, a Penn State sophomore, had been vacationing in Mexico during a school break. After returning to the U.S. he fell ill and was admitted to the school infirmary. His father rushed to the school to see him, but the doctors refused to talk with him, citing privacy concerns. Alex was "out of it" at that point and unable to give consent even if he wanted to.

With regard to mental health issues, the risks inherent in our privacy laws have come under intense scrutiny in the wake of recent violent incidents, from Sandy Hook to Virginia Tech to Aurora. In an attempt to recalibrate the balance between protecting privacy and protecting the public, U.S. Representative Tim Murphy (R-Pennsylvania), a clinical psychologist and co-chair of the Congressional Mental Health Caucus, has introduced the Helping Families in Mental Health Crisis Act. One section of the bill would give mental health professionals more leeway to release information about severely mentally ill adults under certain circumstances.  

So what to do when your child turns 18? First, he/she should sign a health care power of attorney that gives you the authority to get information and make medical decisions for him if he cannot do so. This may be easier said than done, of course: As a father myself, I realize some 18-year- olds will not take kindly to this idea, viewing it as an intrusion on their adulthood. If this is your child's attitude, he may be more receptive to making someone other than you his agent. It could be a sibling, or perhaps an aunt or uncle. Or he might consider meeting, independently, with a good estate planning attorney who can explain the legal facts of life to him. Lastly, there's always the old-fashioned carrot-and-stick approach. No health care power of attorney? Fine - then no car.

Age 18 is also a good time for a child to create a property power of attorney, so that someone else - probably mom or dad - can manage his financial life if he is unable to do so. Most young adults have little in the way of assets to manage, but there are still occasions when he may need someone to act on his behalf. Example: Your child is out of the country and needs money wired to him out of his account; or wants you to handle an insurance claim or hire a lawyer to handle a lawsuit in the event of an accident. 

We all remember the Terri Schiavo case. All of the litigation involved fighting over who should be able to serve as her court-appointed guardian. That would have been a non-issue if she had executed a health care power of attorney and a durable power of attorney.

Many young adults feel that they are invulnerable. We know better. Even newly minted adults need someone watching their backs in the event of a medical emergency. If your child has the proper estate planning documents, you can be there for him.

ABLE Act allows people with disabilities to save and still keep government benefits

The recently passed ABLE Act ("Achieving a Better Life Experience") amends section 529 of the IRS code, allowing people with disabilities to save for the future and remain eligible for means-tested federal benefits. Prior to passage, special needs individuals who accumulated over $2,000 in assets would lost vital benefits such as Medicaid and SSI. Under the new ABLE act, these people will no longer be forced to keep themselves effectively impoverished.

The law allows for the establishment of tax-advantaged savings accounts for the benefit of a disabled individual. The funds in an ABLE account, just like the funds in a Special Needs Trust, may be used only for those services and items not provided by the government, for example, special therapies, housing, transportation, job training, assistive technologies, etc. Any number of people may contribute to the account, but a disabled individual may have only one such account. The accounts do have certain limitations, though:

• Any amount in excess of $100,000 in the account may cause a reduction in government benefits.

• No more than $14,000 may be deposited into the account annually.

• The beneficiary's disability must have developed before the beneficiary reached the age of 26.

• Upon the death of the beneficiary, the funds in the account must be used to repay Medicaid.

Given its limitations, the ABLE account can serve as an adjunct to, rather than a substitute, for a special needs trust or pooled trust. 

The accounts will become available when each state works out its administrative apparatus to comply with the new law.