September 2017: Essential Documents for Young Adults

By: Karen Schaeffer, CFP®
Published: September 20, 2017
By now the members of the high school class of 2017 heading for college or a gap year are finally getting settled. Families across the country are tearing up the check lists from Bed, Bath and Beyond, putting the last box of forgotten items in the mail and starting to enjoy the calm that a slightly emptier nest can bring.  But there is likely one more essential financial planning task that needs attention. Our 18-year-old pseudo adults are real adults in the eyes of the law and we need them to sign very adult-like documents:  a health care proxy with a HIPAA release and a durable power of attorney.   Without them, if a student is incapacitated – even for a short period of time – no one can make healthcare or financial decisions on their behalf without a court order.
A health care proxy, sometimes called a health care power of attorney or health care agent, authorizes someone to make decisions on your behalf. A signed Health Insurance Portability and Accountability Act form gives medical professionals permission to share information about their patient.  A student in one of my NITP retirement classes shared her nightmare with the class. Her son’s roommate called her to say her son was unresponsive and in an emergency room. Not only was she unable to get information about his condition, the hospital wouldn’t even confirm he was a patient there.
While it’s always smart to talk with your lawyer about legal documents, do-it-yourself documents are available at no cost through your state’s Office of the Attorney General. Another resource is Not only can you download the forms for free, they have guidelines for completing them.   In most cases, hospitals will accept a copy of the documents so it’s often recommended to keep the original documents in a safe but quickly accessible place at home and store the papers digitally in a PDF file for immediate access from anywhere.
If our young adults are unable to make health care decisions, they are likely unable to make financial decisions as well. Granted most of our college and gap kids haven’t acquired much wealth of their own but someone may still need access to a bank account or to renegotiate a lease.  These forms can also be nuanced from one state to another but are available online with a simple search “free (fill in the name of your state) power of attorney form.”
It’s hard for many parents to realize the rights of adulthood have been bestowed on their not-at-all-financially-independent 18-year-olds. We’ve been very busy teaching them how to become adults but we know the job is not quite done. Best to get the necessary authority to be their fallback in the event of an emergency. It’s all part of keeping your financial plan on track up and down the family tree.


Karen P. Schaeffer, CFP® is the Managing Member and Co-founder of Schaeffer Financial LLC, an SEC-registered investment advisory firm located in Rockville, Maryland.  She has been a presenter for NITP for over 25 years.   This presentation is for informational and educational purposes only.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or products made reference to directly or indirectly in this presentation will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio. The views and opinions expressed in this presentation are those of Karen P. Schaeffer. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Any hypotheticals or examples are for illustrative purposes only and not indicative of actual results. Past performance may not be indicative of future results Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from Schaeffer Financial LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of Schaeffer Financial LLC’s current disclosure brochure discussing its advisory services and fees is available for review upon request.