Your kids are either coming home for the holidays or possibly even getting ready to start college after the first of the year in some cases. Either way, it is critically important to send them off to college with an ESSENTIAL PACKET to protect them and you as their parents. We’re not talking about supplies for their classes or dorms…something much more valuable. What we’re talking about is how to protect them while they are out of your care in ways most parents I talk to are not aware of…allow me to explain.
While it is a time to celebrate this incredible event of heading off to college, something both the child and the family have all worked hard toward this goal, there’s something else I want you to get in place. Most of the time, in this hopeful and hectic time, lost among the campus tours, class schedules, text books, and clothes shopping, is the idea that there are “legal issues” that need your consideration, particularly if your child is 18 or older.
Your Rights Have Changed
The parents of adult children DO NOT have the same rights they used to when it comes to grades and other academic information or when it comes time to make medical or financial decisions. That’s right, once your child becomes 18 years of age, they are legal adults and the game changes when it comes to information and rights. Without the appropriate legal planning for these issues, you, as a parent, can be locked out of this information and the ability to help your child in the ways you helped them in the past. While it takes a little effort to address, it can create much more peace of mind…it will be well be worth it.
What You/They Need to Have
Once your child turns 18, whether heading off to college or staying at home, there are several legal documents they need to have in place. It is important to understand these and why they are now so critical to your new adult children. Here are some of the most critical ones I recommend you get some help with putting together for your children…
A Will
Thinking about the possible death of your adult child is undoubtedly difficult but is a matter that needs discussing, particularly if he or she owns significant assets outright. If your adult child were to die without a will, laws of intestacy would determine the distribution of his or her estate. If your adult child has no children of his or her own, in most states the estate would then pass upward to the parents, which may wreak havoc on their estate plan.
Durable Financial Power of Attorney
Statistically, young men are approximately 32%, and young women 47%, more likely to become disabled than die. Still, if planning for the possible death of a young person is uncommon, planning for possible disability of one is almost unheard of. If your adult child is the victim of an unfortunate incident resulting in disability, or less tragic, studying abroad, and unable to manage his or her financial affairs, a durable power of attorney can save the time and expense of having a guardian and/or conservator appointed by a court, and allow the nominated parent (or other person) to take care of things like banking, paying bills, and filing taxes. Also, it might just be a matter of your helping your college age children with tax returns, bill paying, dealing with insurance coverage, housing, vehicle insurance and the financial aid office or anything going on at their educational institution.
Power of Attorney for Health Care and HIPAA Authorization
As a financial power of attorney allows the student to designate someone to assist with financial affairs, a medical power of attorney and HIPAA Authorization allow the designation of persons to order prescriptions, continue vision/dental/prescription and preventive health care coverage, to assist if there is a medical emergency from afar or your child is in an accident of any kind.
Insurance
Health – Many college students are included in their parents’ health care coverage and recent reforms allow this until the student graduates from college or turns 26. Whether or not your child is covered on your policy, check with the college or university, as many offer low-cost plans themselves or have arrangements with insurers that could benefit your child.
Car – If your child isn’t taking a car to college, think twice before automatically removing him or her from your auto policy. When your child returns home for visits, will he or she be driving your car? What if, while away at school, your child is asked to be the designated driver for a group of friends? Talk to your auto policy representative about your options.
Property – What if your child’s laptop is stolen from the dorm? Or their iPhone or other personal property? Talk to your homeowner’s insurance representative about protecting your child’s personal belongings.
FERPA (Family Education Rights and Privacy Act)
Gone are the days when parents had unfettered access to their children’s academic records and other educational or college related information. FERPA explicitly prevents a student’s information from being released without his or her permission. There are exceptions but parents should check with the college or university regarding its FERPA policies and consider asking their children to sign a FERPA release authorizing parents to view the student’s academic records.
What To Do Next
While everyone’s situation is unique and different, every child should have the above documents created for their specific situation and needs. If you’re uncertain about how these might affect your child’s current situation or your situation in the future, see your estate planning attorney right away. These issues cant’ wait…do it while they are home from college, before they leave, or while they are in the area. It can take a lot of worry away if you know the facts and the alternatives for how these would work for your particular situation.
If you don’t have an attorney you feel would understand your situation, feel free to CONTACT ME and I can give you some insight and assistance to get this done right away.
Even if you have some of these in place for you and your child, ask yourself one key question, “Is your (and their) life and situation exactly the same as it was last year?” If it is, you are probably still in good shape with regard to your estate plan. If there have been any changes in your (or their) life (even minor ones), I would strongly recommend you get your personal estate plan reviewed to ensure it will do what you expect it to. Unfortunately, the majority of plans we see are not in sync with the current situation and won’t do what people expect they will do. Lower your Risk and get your plan reviewed to ensure it is going to do what you want (and hope) it will do.
I hope this has been helpful. If you do the proper work on this, I can guarantee you will have NO. MORE. TEARS. A little bit of effort here can help you sleep much better at night knowing you can take advantage of the tax opportunities that will be present and that your Estate Plan is in order with the changes that have happened in your life.