Estate Planning for Your High School Graduate: That’s Right, Your Babies are Adults Now!
At CrossPoint Wealth, we have run into many situations when we are speaking to clients about estate planning for themselves, but also for their soon-to-be or current adult children. The problem is that most parents just aren’t informed enough to help their 18-year olds. Many times they need the right professionals, like a fiduciary fee-only advisor or estate planning attorney to potentially help them make better financial decisions.
With this being the case, I asked my friend and estate planning attorney Lawrence Gregory from the Estate & Business Law Group in Libertyville, IL to share his insights in co-writing this blog post.
As the high school graduation party comes to an end (and after searching the garbage for grandma’s graduation check that was accidently thrown away with the card), parents and graduates alike look ahead to the opportunities and challenges that await for these young adults. Their future is full of hope, and the parents are well deserved to share in this excitement. However, this time can also be very stressful, as parents want to make sure they are sending their children into this world prepared, so as to not leave them lost (like grandma’s graduation check).
If your child recently graduated from high school, or is already into their undergraduate studies, your child turning 18 years old is a major legal milestone. While your child will always be “your baby”, the law regards them as legal adults with all the rights and responsibilities of such a status. While your child can now legally vote, buy cigarettes, join the military, and get a tattoo, his/her newfound freedoms can impact the parents in two other important ways:
1. Access to Medical Information
As legal adults, parents no longer have the authority to receive medical information and make healthcare decisions on their child’s behalf. I consistently see situations where a child is injured while away at school, and winds up in the hospital. If your child is over 18 years old, the hospital is prohibited from providing you with any information about the status of your child over the phone. In fact, I have had hospitals refuse to even confirm or deny that a person was even admitted to the hospital as a patient. From there, the parents then must make the frantic and panicked drive to the child’s school (usually at 2am) not knowing whether their child is safe.
2. Estate Planning, Especially for Digital Assets
As many young adults turn 18 years old, they begin to buy cars and have bank accounts. While the relative value of your child’s assets may not be significant at this point, the cost of possibly having to probate your child’s assets will be expensive in comparison to the size of the estate.
More importantly, these young adults have accumulated significant amounts of digital assets and an online presence through the use of e-mail, social media, cloud storage, picture storage, and other online resources. If something happens to your child, the pain is compounded if their memories are lost as well. In the online world we now live, memories are no longer stored in paper journals and photobooks. Instead, memories are chronicled online through social media and in the cloud. Proper estate planning by your child is critical to ensure that you can access and preserve these digital memories.
Fortunately, your child is home for the summer and now is the best time to take care of these important estate planning matters together. At this point, your child’s estate plan does not need to be overly complex and good way to start the process is to simply have your child put together an inventory of assets. Additionally, you will also want to address the issues discussed above by having your child do the following:
Execute a Power of Attorney for Healthcare and HIPAA Waiver
As it relates to healthcare decisions, a Power of Attorney for Healthcare will allow your child to appoint you as her agent to act on her behalf if she cannot act for herself. For instance, if your child is unconscious or in a coma, you will the have to authority to make those necessary healthcare decisions on her behalf. Such decisions include which hospitals your child will go to, what doctors your child will see, what treatment your child will receive, and ultimately whether or not to “pull the plug”. Although it is very hard to think about your child in this way, keep in mind the legal drama that played out in the well-known case of Teri Schiavo, who was in her late 20s when she became legally incapacitated.
In addition to the Power of Attorney for Healthcare, your child should also execute a HIPAA waiver which will allow your child to designate you as a person who is able to receive protected medical information from her healthcare providers. Both the Power of Attorney for Healthcare and the HIPAA waiver are the critical documents that you will need to avert the terrifying middle-of-the-night drive to your child’s school scenario described above. Instead, if your child has a health emergency while away, you will be able to fax or e-mail those documents to the hospital and the hospital should be able to immediately speak with you regarding the condition of your child over the phone.
Execute a Power of Attorney for Property
With respect to property transactions, a Power of Attorney for Property will allow your child to appoint you as her agent to act on her behalf if she cannot act for herself. For example, if your child is incapacitated, you will be able to write checks from her bank account on her behalf.
Execute a Revocable Living Trust or Will
Your child should have a simple revocable living trust, which will allow her to appoint you as her trustee should something happen to her. A revocable living trust will assist in the efficient transfer of your child’s assets and avoid costly probate. In Illinois, however, if the total value of your child’s assets is under $100,000 in the aggregate, your child may be able to get away with a simple will and still avoid probate.
In addition to efficiently transferring your child’s other assets, it is critical that you are able to access and preserve those digital assets which contain your child’s life story and memories. Therefore, it is also a good idea for your child to first organize a list of her most import online accounts. While having access to your child’s usernames and passwords for these accounts might seem like an easy means of accessing those accounts, the unauthorized access of those accounts is generally against the provider’s terms of service, and possibly state and federal laws. As a result, you risk being locked out of an account or having the account deleted. Fortunately, for those who have an estate plan, the Illinois Revised Uniform Fiduciary Access to Digital Assets Act of 2015 allows properly appointed fiduciaries (i.e. an executor or trustee) to have legal access to your child’s digital assets.
At CrossPoint Wealth, we feel that tackling estate planning with your child this summer can be a great way to introduce them to the responsibility of becoming an adult, while also helping put your worries at ease as they head off to college or their next venture.
I believe that every soon to be or current 18 year old should read this blog post with their parents. High schools would also be well served to help deliver this message to their students as they begin to prepare for their future.
I would like to personally thank Lawrence Gregory for his contribution to this important topic. We have been discussing this for a couple years now, and I greatly value his knowledge and experience.
China's Push Toward Excellence Delivers a Global Robotics Investment Opportunity
Written by: Jeremie Capron
China is on a mission to change its reputation from a manufacturer of cheap, mass-produced goods to a world leader in high quality manufacturing. If that surprises you, you’re not the only one.
For decades, China has been synonymous with the word cheap. But times are changing, and much of that change is reliant on the adoption of robotics, automation, and artificial intelligence, or RAAI (pronounced “ray”). For investors, this shift is driving a major opportunity to capture growth and returns rooted in China’s rapidly increasing demand for RAAI technologies.
You may have heard of ‘Made in China 2025,’ the strategy announced in 2015 by the central government aimed at remaking its industrial sector into a global leader in high-technology products and advanced manufacturing techniques. Unlike some public relations announcements, this one is much more than just a marketing tagline. Heavily subsidized by the Chinese government, the program is focused on generating major investments in automated manufacturing processes, also referred to as Industry 4.0 technologies, in an effort to drive a massive transformation across every sector of manufacturing. The program aims to overhaul the infrastructure of China’s manufacturing industry by not only driving down costs, but also—and perhaps most importantly—by improving the quality of everything it manufactures, from textiles to automobiles to electronic components.
Already, China has become what is arguably the most exciting robotics market in the world. The numbers speak for themselves. In 2016 alone, more than 87,000 robots were sold in the country, representing a year-over-year increase of 27%, according to the International Federation of Robotics. Last month’s World Robot Conference 2017 in Beijing brought together nearly 300 artificial intelligence (AI) specialists and representatives of over 150 robotics enterprises, making it one of the world’s largest robotics-focused conference in the world to date. That’s quite a transition for a country that wasn’t even on the map in the area of robotics only a decade ago.
As impressive as that may be, what’s even more exciting for anyone with an eye on the robotics industry is the fact that this growth represents only a tiny fraction of the potential for robotics penetration across China’s manufacturing facilities—and for investors in the companies that are delivering or are poised to deliver on the promise of RAAI-driven manufacturing advancements.
Despite its commitment to leverage the power of robotics, automation and AI to meet its aggressive ‘Made in China 2025’ goals, at the moment China has only 1 robot in place for every 250 manufacturing workers. Compare that to countries like Germany and Japan, where manufacturers utilize an average of one robot for every 30 human workers. Even if China were simply trying to catch up to other countries’ use of robotics, those numbers would signal immense near-term growth. But China is on a mission to do much more than achieve the status quo. The result? According to a recent report by the International Federation of Robotics (IFR), in 2019 as much as 40% of the worldwide market volume of industrial robots could be sold in China alone.
To understand how the country can support such grand growth, just take a look at where and why robotics is being applied today. While the automotive sector has historically been the largest buyer of robots, China’s strategy reaches far and wide to include a wide variety of future-oriented manufacturing processes and industries.
Electronics is a key example. In fact, the electrical and electronics industry surpassed the automotive industry as the top buyer of robotics in 2016, with sales up 75% to almost 30,000 units. Assemblers such as Foxconn rely on thousands of workers to assemble today’s new iPhones. Until recently, the assembly of these highly delicate components required a level of human dexterity that robots simply could not match, as well as human vision to help ensure accuracy and quality. But recent advancements in robotics are changing all that. Industrial robots already have the ability to handle many of the miniature components in today’s smart phones. Very soon, these robots are expected to have the skills to bolster the human workforce, significantly increasing manufacturing capacity. Newer, more dexterous industrial robots are expected to significantly reduce human error during the assembly process of even the most fragile components, including the recently announced OLED (organic light-emitting diode) screens that Samsung and Apple introduced on their latest mobile devices including the iPhone X. Advancements in computer vision are transforming how critical quality checks are performed on these and many other electronic devices. All of these innovations are coming together at just the right time for a country that is striving to create the world’s most advanced manufacturing climate.
Clearly, China’s trajectory in the area of RAAI is in hyper drive. For investors who are seeking a tool to leverage this opportunity in an intelligent and perhaps unexpected way, the ROBO Global Robotics & Automation Index may help. The ROBO Index already offers a vast exposure to China’s potential growth due to the depth and breadth of the robotics and automation supply chain. As China continues to improve its manufacturing processes to meet its 2025 initiative, every supplier across China’s far-reaching supply chains will benefit. Wherever they are located, suppliers of RAAI-related components—reduction gears, sensors, linear motion systems, controllers, and so much more—are bracing for spikes in demand as China pushes to turn its dream into a reality.
Today, around 13% of the revenues generated by the ROBO Global Index members are driven by China’s investments in robotics and automation. Tomorrow? It’s hard to say. But one thing is for certain: China’s commitment to improving the quality and cost-efficiency of its manufacturing facilities is showing no signs of slowing down—and its reliance on robotics, automation, and artificial intelligence is vital to its success.
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