Once a child reaches the age of 18, parents lose certain rights to their healthcare information but continue to be responsible for certain of their financial choices, accidents, and liabilities. The summer is an excellent time to take stock of your estate plans and mitigate risks associated with adult children.
Rights
Accidents are the leading cause of death for young adults, and a quarter-million Americans between 18 and 25 are hospitalized with nonlethal injuries each year. Yet, in the event of a medical illness, injury, hospitalization, or incapacity, the Health Insurance Portability and Accountability Act (HIPAA) limits use, disclosure, and release of individually identifiable health information. Once a child reaches the age of 18, he or she is considered an adult and is entitled to all privacy protections afforded by the law. This includes privacy from parents or other guardians. This is true even if you provide your child with health insurance, claim the child as a dependent on tax forms, and are paying the bills.
To alleviate such complication and stress, before your child heads off to college, have a family discussion about the necessity and benefits of executing a HIPPA Authorization Form, and Medical and Financial Powers of Attorney.
Risks
While children over the age of 18 are considered adults capable of making their own decisions and parents lose rights to certain medical information, among other information, parents continue to be responsible for certain of their adult-children’s actions. Most parent responsibility centers around (1) vehicles; (2) parties; and (3) credit cards.
Parents who own the cars their children drive can be held responsible for the acts of the driver. This includes responsibly for all accidents they cause. It can also include responsibility for any injuries that a third party (whether the third party is inside the car or not) may suffer as a result of the child’s negligent or reckless driving. This liability extends to anyone else who drives the car, including college friends and roommates. Liability is greater if a parent knows their child is a reckless or negligent driver or has a history of accidents.
Parents can also be held responsible for any parties hosted by their child. This includes parties held at the parent’s home and parties hosted at the student’s off-campus housing. If a child hosts a party and there is physical damage, to their apartment for example, the parent can be responsible for that damage. This is true regardless of who caused the damage. If a party guest becomes injured, whether do to their personal choices such as alcohol or drug consumption or due to the actions of other party guests, parents can be held responsible for medical bills and other damages related to the injury. This liability exists whether the injuries are caused intentionally or unintentionally.
Finally, parents can be responsible for the financial choices their children make. The Credit Card Act requires children under the age of 21 that do not have any income to have a co-signer in order to obtain any credit card. As a co-signer, parents have responsibility for monitoring their children’s spending and paying the balance due. If bills are unpaid, both the parent and the child’s credit can be damaged. This liability an extend even after the child turns 21 unless the parents remove themselves from the account(s).
Parents with children entering adulthood are in a complicated time. Parents lose rights to certain information about their children but remain responsible for many of the child’s financial choices, accidents, and liabilities.
To ensure rights and access to information, parents should have their children execute a HIPPA Authorization Form, and Medical and Financial Powers of Attorney. To mitigate risks, responsibly, and liability, parents should take action to protect their assets through trusts and other estate planning tools. Parents should also consider placing their child’s assets in a trust to protect those assets.
Allison Kierman is the Managing Partner of Kierman Law, PLC, a Scottsdale-based estate planning and probate litigation firm. Call us at 480.719.7333 or email us at akierman@kiermanlaw.com to discuss your family needs and the benefits and necessity of estate planning before your child heads off for college next fall.