The first year of college is an exciting time for students and parents alike. Graduating from high school is an accomplishment, and the pursuit of higher education should be celebrated. While most incoming first-year students are concerned with dorm rooms and book purchases, other important legal tasks could be flying under the radar.
The idea of preparing an estate plan for a rising college freshman might sound foreign. While it is true that most students heading to college are in good health and have a bright future ahead of them, there are aspects of an estate plan that are important to have in place before they step foot on campus. These 18-year-old students are adults and, without certain legal documents in place, their parents might not have the ability to meet their needs if they become incapacitated. Continue reading to learn more about the importance of college student estate planning.
Why College Students Need An Estate Plan
The concept of an estate plan for a college student might seem strange at first. It is true that estate plans generally involve distributing assets upon a person’s death, and most college students have few assets to speak of. It is important to remember, however, that an estate plan is about more than preserving financial assets for future generations. Another important aspect of an estate plan is the ability to leave important medical decisions in the hands of loved ones should a college student become incapacitated.
Most college freshmen reach the age of 18 prior to or during their first year on the college campus. Although they are students, the law treats them as adults that are capable of making their own health decisions. The status of an adult comes with some important legal rights related to medical privacy.
Unfortunately, these rights can sometimes do more harm than good when a college student suddenly becomes incapacitated. Whether it is due to illness or injury, that student’s parents will have little ability under the law to evaluate their child’s medical records or address their treatment needs. This is true even if the child remains on their parents’ health insurance policy.
This stressful situation could be made worse for parents who are physically distant from their children. Dealing with privacy issues in person is one thing, but seeking information about a child in another city or state could be even more difficult. In fact, some hospitals might refuse to acknowledge whether your child is even in their facility or not.
Thankfully, a basic estate plan could alleviate these issues. With the help of certain estate planning tools, you could ensure that you have access to your child’s medical records and have the power to make important decisions on their behalf when they are unable to do so for themselves.
Important Estate Planning Tools For College Students
When it comes to estate planning tools for college students, the most important options relate not to asset management but to their medical care. When an adult college student is incapacitated by an injury or illness, the parents are often left with few options for directing their care or reviewing their medical records. A simple estate plan for your college student will avoid delays and pitfalls that could hamper your ability to ensure your child has the care they need.
HIPAA Authorization
Initially passed in 1996, the “Health Insurance Portability and Accountability Act” provides patients with important privacy rights. Commonly referred to as HIPAA, this act restricts access to an adult patient’s health records. Written permission from the patient is necessary before a doctor or hospital can turn over a patient’s medical records to a third party—including a parent. This can be problematic if your adult child has become incapacitated, as they are not capable of giving consent to the medical care provider to share their records with you.
Thankfully, this issue can be easily remedied ahead of time. A HIPAA authorization is a simple legal document that grants an individual—often a parent—the right to access and review medical records. Access to these records is vital if you are tasked with making a critical decision about their care when they are unable to do so for themselves.
Your estate planning attorney will recommend that you grant authority to 2 or 3 persons who may act as your appointed agent and to whom medical professionals can disclose confidential medical information. This ensures that important medical information may be communicated without the fear of HIPPA violations. These people would be listed in addition to the appointed individuals who would have authority to make direct health care decisions.
HIPAA authorization is especially important for cases where your child requires medical care but is not considered legally incapacitated. In these circumstances, other estate planning tools like medical powers of attorney might not be in effect. HIPAA authorization allows you to review the medical records in this situation.
Living Wills And Medical Powers Of Attorney
While living wills are common in many states, they are not used in California. Instead, California uses medical powers of attorney. This estate planning tool will put the power to make important decisions about your college student’s care in your hands, and it will ensure that their wishes are adhered to when they are incapacitated.
A medical power of attorney is largely about end-of-life care, so this can be a difficult decision for many families. However, having this discussion with your child could provide the peace of mind you deserve. By documenting these decisions, your child could also ensure that their wishes are adhered to.
Medical powers of attorney vary in complexity, but they generally set out a wide range of potential medical decisions. For example, by executing this type of document, your child could give future care providers guidance on things like their desire to be resuscitated should they become comatose and unresponsive.
While a medical power of attorney gives you a framework to understand your child’s intentions, it is worth noting that it is impossible to foresee every possible outcome. As circumstances change, the needs of your child might change as well.
Therefore, a medical power of attorney also allows an adult to name another individual as their attorney-in-fact, who may make important healthcare decisions in the event of incapacity. Therefore, it could be beneficial to you and your family for your child to execute a medical power of attorney that delegates these powers to you should they lose the ability to care for themselves.
A medical power of attorney could take effect in numerous situations. If your child is unconscious from a head injury or becomes comatose due to a serious medical condition, you would gain the legal right to make medical decisions on their behalf. This includes determining their best course of treatment in conjunction with their medical team.
Financial Durable Power Of Attorney
There are other important considerations to make for an incapacitated child beyond their immediate medical care. It is also important in many situations to gain access to their financial accounts. It should come as no surprise that financial institutions will not simply hand that information over. Without prior authorization, accessing these accounts and taking control of your child’s finances can be difficult. It would require a court order, which can be a costly and time-consuming process.
The good news is that there are steps you can take to avoid going to court to access your child’s financial accounts. This is possible through an estate planning tool known as a durable power of attorney.
A durable power of attorney has much in common with a medical power of attorney. This written document gives a specific person—typically a parent—the authority to manage matters of a financial or legal nature. This power goes beyond simply accessing bank accounts, as it also allows the attorney-in-fact to pay bills or meet other financial obligations.
The financial power of attorney also allows the attorney-in-fact to apply for Social Security benefits on their college student’s behalf. When a college student suffers a debilitating injury or illness that is likely to leave them disabled, they could be entitled to benefits through the Social Security Administration. A durable power of attorney could let you apply for those benefits on your child’s behalf.
Seeking Help With A College Student Estate Plan
If your child is preparing for their first year of college, it is understandable for you to worry about the future. While planning for the unthinkable can be difficult, doing so could also provide you with peace of mind as your child leaves home for college.
An appropriate estate plan could dramatically reduce the challenges and delays that can occur should your child become incapacitated while at college. However, developing the right estate plan for the rising freshman in your life requires an understanding of the laws surrounding taxation and medical privacy.
Our team is ready to help you develop the right estate plan for your child. With our help, we could ensure that you have the authorization needed to see to their care should they suffer a traumatic injury or illness. Reach out right away to get started.
