Is Your Kid College Bound? Here are the Estate Planning Documents They Need
It’s one of the proudest moments a parent can experience – sending their child off to college. It is a recognition that your child is entering a new chapter in life where they will (hopefully) learn to become an independent, self-sufficient adult.
But this venture into adulthood also means that you, as a parent, will no longer be able to access your child’s medical and financial records or make decisions on their behalf when they reach the age of majority (i.e. 18 in most states), according to the Wall Street Journal. This means it is critically important for your college-bound child to have an estate plan in place that includes the appointment of trusted individuals who are capable of making important decisions concerning your child’s medical care and finances, in case they become incapacitated.
The vast majority of 18-year-old college students never even contemplate drafting an estate plan. This is typically due to the fact that these young adults lack much in the way of personal property, finances, and are oftentimes unmarried with no children. Nevertheless, without proper legal documents, if a catastrophic event were to occur where your child was unable to make their own medical decisions (e.g., a serious car accident, hazing incident, etc.) their parents would not have the legal authority to access and manage their child’s financial accounts.
Legal Documents Your College-Age Kid Needs
Even if your son or daughter is reluctant to draft a detailed, extensive estate plan, they need to, at the very least, have a valid legal document that appoints a trusted friend, parent, or relative to serve as their “health care proxy” in case they become incapacitated. A “health care proxy” is someone who has the authority to make medical decisions in the event the patient is incapacitated.
Another important document is a HIPAA release. HIPAA is an acronym for “Health Insurance Portability and Accountability Act of 1996.” This federal law is intended to protect patient privacy. However, it can be an encumbrance in a situation where a parent or relative is attempting to obtain medical information about a loved one who is in a coma or suffered a severe injury. The HIPAA release gives medical practitioners the ability to share information with the individuals named on the form.
In addition to health care documents, your child should have a valid document establishing a financial power of attorney. This is a document that allows the appointee (oftentimes a parent) to access their child’s financial accounts at any time, rather than only if they are declared incompetent. Having this document in place is extremely important so you can ensure your child’s bills are paid on time and their credit is not harmed. Please be advised that this document typically needs to be updated every couple of years to ensure financial institutions will accept it, if necessary.
Benefits of Planning Early
Taking the above-described actions to get a plan in place will not only reduce the uncertainty and stress associated with an unexpected health issue or accident involving your child, but it will get them into the habit of thinking about the future and contemplating a variety of different scenarios. This could encourage them to start planning their estate early and making better-informed and strategic decision concerning their finances and other major life decisions.
Need Help Drafting Documents for Your College-Bound Child? Contact The Polaris Law Group Today
The Polaris Law Group is ready and able to help you and your child draft health care and finance-related planning documents. The firm is comprised of experienced and skilled St. Charles trust and estate attorneys Scott Stork and Raymond Chandler who understand the legal requirements necessary to create valid estate planning documents. Schedule a meeting with Scott or Raymond today by phone or by filling out a quick contact form on our web site.