The three documents your child needs to sign at 18

What you may not know is that you can lose all power to make financial or medical decisions for your child in an emergency or if they are unconscious. Doctors can use their best judgment on how much they reveal to parents, so being named your child's representative is one of the only ways to ensure you can make medical choices for your child and have access to him or her.

Get these three documents signed

Three important documents to discuss with your child when they turn 18 are:

  • HIPAA to authorize doctors or nurses telling you about medical situations, possible treatments and relevant medical history
  • Medical power of attorney to permit you to make complex medical decisions if your child is unconscious or to refuse treatments for them
  • Durable power of attorney to give you financial authority if your child is incapacitated for any reason, or if he or she studies abroad and needs tax forms signed

Drafting terms in these documents can be as broad or specific as your situation or state requires. It is also a great idea to have them all scanned with copies kept at home as well as on everyone's phone should an emergency arise.

While this can be a difficult subject to discuss with your child, it can prove to be quite valuable in the event of a tragic situation. Understand that you don't have to figure this all out on your own, either. You can consult an attorney who can help you and your child understand the legal measures that can protect his or her medical and financial best interests.

If you don't know about 'lack of liquidity' you're already behind

Estate planning can be tricky and often sneaks up during stressful times of family illness, discussions about money, or a loved one getting older. Mistakes are easily avoidable with some careful planning and knowledge of what's in store for you.

One common mistake is a lack of liquidity, or not being able to convert assets into cash quickly to cover future unforeseen costs. Lacking liquidity is especially important when it comes to estate planning, since people do not know how significant the cost may be to settle affairs and cover taxes or related estate expenses quickly.

Nine months later--and in cash

Luckily, Florida doesn't impose any estate or inheritance taxes. However the federal taxes on an estate are generally due before nine months have passed after death. What makes this amount of money hard to handle is the fact you pay taxes and fees in cash. The cost can force you to liquidate assets you weren't prepared to spend or to scramble to raise the necessary funds quickly.

Liquid assets are essential

Be aware of all the assets or accounts you have on hand to utilize if cash is needed fast. Some useful assets include checking and savings accounts, investments, market money funds, mutual funds, stocks, bonds and more.

Avoid these problems

Being financially aware and knowing your easily liquidated assets could be the difference between a smooth estate transition and a stressful one. Don't be caught off guard by common mistakes--prepare far in advance with your family and trusted counsel.