Hello, adulthood! If you’re a parent to a new (or soon-to-be) college-aged kiddo, keep reading.
Listen, I am probably going to bawl my heart out when my kids turn 18 (I’m a crier; it’s okay!). But I’m also a planner, and so I like to make sure alllll those contingencies are covered.
“When do I need to have an estate plan?” is a common question that I hear, but most folks are SHOCKED when I say “as soon as you turn 18.”
But why? Eighteen? I mean, most people think of estate planning as something you do because you’re getting older, or because you have wealth, or because you have young children to protect. Yes, those ARE all great reasons to have an estate plan in place (but honestly, I think all y’all need one).
So why do college students need to get started with estate planning?
The short answer? Well, because they’re adults now (usually).
Eighteen is a pretty big milestone for any young adult. Sure, sure. High school to college is a ginormous transition (for kiddo and parents alike). But that “ADULT” part isn’t just how we perceive them… it’s a legal fact once they turn 18.
What does this mean?
They are responsible for their own financial and medical choices (yes, even though 18 is young, young!).
You (as their parent) cannot legally access their medical records, make medical or financial decisions for them, or access any financial records that are not explicitly shared between the two of you (e.g., bank accounts, school records, etc.).
You’ve taken care of them for eighteen years! You handled alllllll their business (or at least were involved in it!). Now all you’re entitled to is a polite “I can’t provide you that information” when you call?! (And no, it does not matter whether they are still living with you/still on your insurance/still your dependent for tax purposes/etc.)
And also a gentle (virtual) hug.
But aside from the very real emotional response that this likely provokes, there are some legitimate practical concerns that you should consider.
EVERY ADULT (you, your sister, your neighbor, your boss, your newly-adult kid) should have an incapacity plan in place.
While this may not be a priority for your 18-year-old and their (likely) limited funds, as a parent I’m imploring you to consider helping them get these crucial docs in place. Do they need the full protect-the-assets kit-and-caboodle? Nah. Not yet. But incapacity docs?
Here are the basic three documents that are oh-so-necessary for the college student in your life:
1. Healthcare Power of Attorney
Naming an Agent to make healthcare decisions is possibly the most important piece of this puzzle. This document allows your child to appoint someone (typically one or both parents) to make health care decisions for them if they are incapacitated and cannot make such decisions for themselves.
Imagine a scenario where your child is in a car accident and arrives at the hospital in need of major medical care. Perhaps they are unconscious and cannot even communicate with the hospital. Without a valid POA, the hospital will not allow you to act on their behalf and the courts may need to get involved (not a good look in an emergency!). By executing this document in advance, the legal red tape is gone. You can speak to the doctors about their condition and even make decisions for them if they cannot do so themselves.
2. HIPAA Authorization and Release
This document goes hand-in-hand with the one above. HIPAA (the Health Insurance Portability and Accountability Act) has strict rules around private medical data and information. Without an express release, medical personnel are not legally entitled to share information with you about your child’s condition.
This document allows your child to specify who can access information about their medical records and health condition. But, unlike the Healthcare POA, the HIPAA authorization is not just for emergencies and incapacitation. Unless specified otherwise, the HIPAA Authorization would also allow you to access your child’s medical records even if they’re not incapacitated. For example, If your child has a complicated or long term health condition, this can be doubly important to have in place.
3. Financial Power of Attorney
While the other two documents clearly focus on medical needs, it’s important to remember that as an adult your child also has financial independence and may have plenty of new responsibilities on their plate: rent, car, tuition payments, credit cards, etc. But again, in an emergency, who handles all that?
A Financial Power of Attorney designates someone to access your child’s financial accounts and handle other personal matters (this could include academic issues, for example). A carefully drafted Financial POA doesn’t have to take away your child’s right to manage their own finances; it can be set up to only take effect in the event of an emergency. It’s an added layer of protection that every adult should have in place to prepare for the unexpected.
That’s it. These three documents can protect your child in SOO many circumstances, and they’re absolutely worth the time to do them right.
Yes, they can (quite literally) be a lifesaver for your newly-”grown” child. Without them, you may be faced with costly and time-consuming delays involving the courts (usually through a guardianship or conservatorship) to be able to act on your child’s behalf. Not a good look, especially in an emergency.
If you have a child who headed off to college this fall, or even one still at home who is newly 18 (or older!), grab them and schedule a quick Zoom chat with me. We can chat through options to make sure they have everything in place now.
Sign up here for an online consultation—casual, no pressure, and absolutely free!
You may also contact me by clicking this link. I cannot wait to hear from you!