Estate Planning for College Students

This article was written by Hance | Wickham associate attorney Beverly Ward Via.

 

A child turning 18 is a momentous occasion, and it typically coincides with that child leaving home and going off to college. It’s a time of limbo, in which parents are often still responsible for children financially, but also in which children are officially becoming adults and getting new rights and responsibilities.

 

One of the most important areas in which this takes places involves HIPAA laws and how doctors and hospitals regard children who have just legally become adults. Even if you are the parent of an 18-year-old who lives at home, you’re required to have a medical power of attorney designation to be able to make medical decisions for your child. Many people understandably, but incorrectly, assume that being a parent is enough to have access to medical information and authority to make decisions on behalf of one’s child. But once that child is 18 years of age, that’s no longer the case.

 

Fortunately, drafting legal documentation to grant power of attorney rights is a simple and relatively affordable process. At Hance|Wickham, for instance, we recommend preparing both medical and statutory durable general power of attorney documents that can be customized to meet a particular family’s needs if necessary, and process generally just requires one sit-down meeting with everyone involved.

 

The first step, of course, is for parents to let children know this is something the parents need and something they want to do so that they can continue to assist and represent the child in an emergency. It’s not the easiest conversation to have – after all, it would be used in a situation where a child is so injured that he or she can’t interact with medical staff – but it’s clearly in the child’s best interest to have an informed advocate who knows that child and can respond to his or her changing medical needs in an emergency.   The medical power of attorney is only effective when the adult child is not able to speak for himself or herself.  If the adult child is able to make his or her own decisions, then the medical power of attorney is not effective.

 

If an emergency arises and the parents of an adult child don’t have a medical power of attorney, the only way they can regain the authority they had before their child turned 18 is to obtain legal guardianship. Even when the courts are aware it’s an emergency situation, it’s not automatic, and you can lose valuable time and treatment opportunities while waiting for guardianship to granted.

 

And power of attorney rights aren’t just limited to parents with adult children. It’s also possible, of course, for parents to name one of their adult children as medical power of attorney should both of them be similarly incapacitated, and that paperwork can be drafted at the same time as the child’s. If parents believe that their adult children are prepared to make those decisions, proposing this can actually be an expression of family members loving and trusting one another.

 

It’s also important for children to know that a medical power of attorney document does not have to be in effect forever. A medical power of attorney can be revoked at any time, and it can also be drafted to cover a finite time period – say, for example, the four or five years in which your son or daughter expects to be in college.

 

In order to assist an adult child with financial or other legal matters,  a durable general power of attorney is required. This is a separate legal document that authorizes a parent to help the adult child with financial and legal matters, other than medical decisions.  A statutory durable general power of attorney is a complementary legal document – the medical power of attorney is only for medical decisions; the statutory durable general power of attorney is for all other legal decisions. If there’s a case of identity theft that impacts the child’s financial situation, for example, a parent can help resolve that issue on behalf of the child – but can only really do so with written statutory durable general power of attorney signed by the adult child.

 

A big difference between the two documents is that, unlike the medical power of attorney that only becomes effective if the adult child cannot make medical decisions, the statutory durable general power of attorney grants broad decision making authority for financial matters and is effective immediately regardless of the adult child’s capacity to make decisions unless specifically limited in the document.  This general power of attorney can be limited to certain types of transactions, for a certain duration, and/or to only take effect on the adult child’s incapacity.  The necessity and the scope of the general power of attorney should be considered carefully.  Again, a statutory durable general power of attorney document does not have to be in effect forever – it can be revoked at any time.

 

If your son or daughter is about to go off to college, it’s a good idea to have the preparation of a medical power of attorney and a durable general power of attorney on the checklist of things to do. Once you get the documentation, a copy of the medical power of attorney can be kept on file with your family’s physician, and, of course, both parent and child should retain a copy – both parent and child should keep copies of the statutory durable general power of attorney as well. As a parent, both powers of attorney may be the most important legal documents you can secure –they allow you to be a parent in the very kind of emergency when your child needs you the most.