Every adult in Wisconsin needs at least a basic estate plan. Yes, even a college student buried in debt needs at least two documents. These documents are a health care power of attorney and a financial power of attorney. The focus of this basic planning is to ensure the student has someone to make health care decisions or manage finances in case of a period of incapacity. This article will first provide the Wisconsin definitions for incapacity. Then I will discuss the importance of naming an agent to make decisions for health care followed by the authority to handle financial matters.
WHAT IS INCAPACITY?
The standards for health care and finances are very similar and can be summarized as the inability to make and communicate an educated decision about the topic in question. In real life, a college student would most likely fall into this situation due to a temporary condition caused by an accident or a medical problem. Most parents are lucky in that these situations rarely arise. But if they did, a few documents can save cost, time, and anxiety. At the end of this article, the specific definitions are provided.
BUT I AM THE PARENT–WHY CAN’T I DECIDE?
Wisconsin does not have a law allowing parents to make health care decisions for their adult children. The legal remedy is a guardianship proceeding. In a recent Wisconsin case, a young adult was seriously injured in car accident. The child was unable to make medical decisions due to the injuries. As treatment options were being considered, no one had the legal authority to make a decision. So instead of being able to concentrate solely on the treatment plan for their child, the parents also needed to be engaged with the legal system to gain the legal authority to make decisions. This guardianship process is costly and time consuming. If the adult child had completed a health care power of attorney, the court guardianship would have been unnecessary. Even if the young adult was married, the spouse also would have lacked legal authority and the guardianship proceedings still would have been necessary.
If the young adult had a health care power of attorney, an agent would have been appointed to make the important medical decisions without the need for a guardianship. The health care agent would have been selected by the child, not a guardian selected by a judge. The child also would have been able to provide guidelines to be followed by the health care agent. The parents then could have been focused on the medical issues without also needing to worry about legal proceedings.
Most college-age adults want to exercise independence. Banks accounts, cars, rental agreements are often in the child’s name. Schools also have very strict privacy rules. Without a power of attorney for finances, a parent will be hampered in the ability to manage their children’s financial matters. Banks would be unable to legally share financial information with the parents or other family members.
The simple and low-cost solution to this problem is for the college student to meet with an attorney to have these two types of powers of attorney prepared. In most cases the student will name the parents followed by adult siblings or other relatives as the agents. Many of my clients have seen the importance of this advice and as a result asked me to prepare these documents at the same time the parents’ documents are being prepared or if the children are still underage as an eighteenth birthday present for their child.
STANDARD FOR INCAPACITY UNDER WISCONSIN LAW–HEALTH CARE
“Incapacity ” means the inability to receive and evaluate information effectively or to communicate decisions to such an extent that the individual lacks the capacity to manage his or her health care decisions. Wis. Stat. § 155.01(8).
STANDARD FOR INCAPACITY UNDER WISCONSIN LAW–FINANCIAL MATTERS
“Incapacity ” means the inability of an individual to manage property, finances, or business affairs because the individual . . . has an impairment in the ability to receive and evaluate information or make or communicate decisions even with the use of technological assistance. Wis. Stat. § 244.02(7).