Preparing Teenagers for College: Estate Planning for Young Adults

When a parent prepares to send their high school senior to college, there are a lot of things on their mind. Room and board, tuition, books, roommates, and checking out their car. But, parents often forget their baby is now an adult and they need to make sure their child is legally protected.

Once children reach 18 years of age, a parent is no longer able to automatically make medical or financial decisions on behalf of the child. To do that, the child must have a medical power of attorney or a financial power of attorney appointing their parents as their agents. Without these documents, the parents may be forced to spend time and money on a court proceeding to be named guardians over their child to make decisions for an incapacitated child. Making matters even worse, parents are not privy to medical information about their child simply because of their parental status. So, if an adult child (over 18) is in an accident while at school, a parent may not be able to access their medical information. To do that, you need something called a “HIPAA disclosure authorization. Before you send you child off to the wonders of their college experience, take time to have these three relatively simple documents so you can avoid any of these problems.

Power of Attorney (or Durable Power of Attorney). A power of attorney allows the signor, called the Principal (i.e., your college student) to appoint an agent to act on his or her behalf concerning financial affairs. The power of attorney may be general (meaning that the POA becomes effective immediately upon signing) or springing (which means that the POA is not effective until a future event or date–usually the event that the signor is declared incapacitated by a doctor). This document allows an appointed agent to do things like pay bills, manage bank accounts, and deal with real estate issues. The power of attorney must be signed before a notary.

Medical Power of Attorney. A medical power of attorney allows an adult (again, your college student) to appoint a person (called the “agent”) to make medical decisions in the event the student is unable to make decisions.

HIPAA Disclosure Authorization. The “Healthcare Insurance Portability and Accountability Act” signed in 1996 was designed the protect a person’s private healthcare information from disclosure. Generally, that is a good thing, but it can cause problems when a young, adult child is incapacitated, and the parents are unable to obtain information about their care or condition. Each student needs to sign a HIPPA Authorization before they go off to school.

Once executed, the original copies of these documents should be kept by the student, and the parents (or other appointed agents) and any health care professionals seen by the student should have copies.

So, add this to the list of things to get done before you ship your baby off to college. It's easy and quite affordable to do.

If you have questions, please email me at joel@lpfirm.com.