It is that time of year for high school seniors to march across the stage (maybe virtually this year) and get a diploma. Many of these students will head off to various colleges in the fall. What should parents of seniors heading off to college do in the way of estate planning for these new adults?
Most of these students will not have significant assets to their name at this point, but that does not mean they do not need an estate plan. Estate planning for college kids has more to do with incapacity planning. Since parents can no longer make decisions for their children legally once the child reaches the majority age of 18, several documents need to be in place for their protection.
At a minimum, these students need the following 3 documents:
- Financial durable power of attorney
- Healthcare power of attorney
- HIPAA authorization.
The financial durable power of attorney naming a parent as an agent allows the parent to step in should the child become incapacitated and manage his or her financial affairs. The students will likely have rent and utility payments as well as a credit card. Without this document in place, the parents would have to petition the court for guardianship of the estate in order to step in and take care of these bills and other financial matters. The financial durable power of attorney allows the parent to take control immediately once the event causing incapacity occurs.
Similarly, the healthcare power of attorney naming a parent as healthcare agent, allows the parent to step in and make healthcare decisions upon the child’s incapacity. This may include choosing an appropriate doctor or caregiver, choosing a healthcare facility or making decisions regarding medication and treatment. In a medical emergency, the HIPAA authorization allows the parent to access private medical information that is protected upon the child turning 18.
Note that neither of these power of attorney documents usurp any power from the child-turned-adult unless it can be shown the person is incapacitated. These documents do not give the parents power to step in and manage affairs for a perfectly healthy, normal-functioning adult child. Once your child becomes a legal adult, many areas that were once under your control as a parent are now solely up to the new adult.
Depending on your child’s wishes, it may be prudent to also draw up a will and/or a living will. A last will and testament allows the child to state who should receive any and all assets owned at his or her death. It also allows him or her to express any funeral or burial wishes. A living will allows your child to express certain wishes for his or her end-of-life care such as receiving life support. These can be heavy topics to discuss with children-turning-adults but important nonetheless. The experienced estate planning attorneys at Stouffer Legal understand how to communicate with those in this age group making this huge transition into adulthood.
If you have a new graduate – congratulations! We hope you have an amazing time celebrating. But before heading off to the next chapter, pencil in some time to discuss estate planning for your college student. You can schedule an appointment by calling us at (443) 470-3599 or emailing us at office@stoufferlegal.com.
