The Planner's Perspective: Planning For Children That Need A Higher Level Of Care

Paul Morrone |

By Paul Morrone CFP®, CPA/PFS, MSA

Caring for a child with a physical or mental handicap is a life-long job that requires immense emotional strength and a constant dedication of time and resources. While the child is in their minor years (under 18), the custodial parent(s) generally have it easy, at least from a legal perspective. When the child reaches the age of majority (generally age 18), however, they are deemed to be an adult under the eyes of the law and parents may no longer be able to monitor and provide guidance over healthcare, finances or other matters. Of course, the degree to which the child’s mental capacity is affected has a large bearing on their potential going forward, and many individuals with social or learning disorders have grown up to excel in both their personal and professional lives.  But what if your child, or someone you know, is in that gray area where the future is much less certain?

Parents or guardians have a couple of options to remain a legal influence in a child’s life after they have maintained the age of majority with some proper planning. The hard line in the sand would be to establish a conservatorship, giving the parent or guardian full legal authority over an individual’s financial and healthcare matters. This may be a solution for children that have more severe conditions and that have demonstrated an inability to act in their own best interest. Individuals faced with this decision will likely understand that their child will require longer-term, or even life-long care.

There are many instances, however, when a parent has concerns over an adult child’s decision-making capabilities but may feel that a conservatorship is too extreme of a measure. This may arise when the future is still uncertain, but the child has demonstrated a promising ability to function independently. Without proper planning, headaches and legal roadblocks can appear during isolated instances that require the intervention of a parent or guardian. It may be as simple as the parent’s desire to have a discussion with a healthcare professional regarding the child’s condition or care plan (prohibited under HIPAA laws), or as involved as helping a child make sound financial decisions as they begin to accumulate wealth and manage their own finances.

Children that suffer from disorders such as depression, anxiety or autism are often high-functioning and can act in their own best interest without worry. However, there may be periods of time when they are in a compromised state of mind and would benefit from the guidance of a person in sound mind. In this case, it may be worthwhile to have the child proactively execute a durable power of attorney, healthcare power of attorney and HIPAA disclosure authorization with a designated representative to provide oversight in times of need. These documents can allow a child to live their life independently but provide a legal means of intervention in the event it is needed by a parent or guardian in their adult years. It is also important to note that these documents can be removed by the principal at any time as they are generally signed on a voluntary basis, meaning a child can preserve their independence entirely or choose another agent if they so choose.

A durable power of attorney will also survive an individual’s incapacity, meaning that if the person’s condition deteriorates, the appointed fiduciary (agent) will continue to be able to exercise power over the adult child’s financial matters. A healthcare power of attorney, in conjunction with a HIPAA disclosure authorization, will give a named individual the legal authority to discuss and review medical records with healthcare professional and help craft a tailored care plan for the individual in need. While there are other less invasive, or more extreme, options available to parents and caretakers, establishing baseline expectations during early adulthood may be a proactive approach designed to benefit all parties involved over the long-term. 

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

US Wealth Management and US Financial Advisors and LPL Financial do not provide legal advice or services.