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Estate Planning Documents That Every College Student Needs…and Why
One of the more important steps—albeit a rarely talked about step—for our adult children who are heading off to college is estate planning. Our kids will always be children to us. Throughout their lives, we’ve had financial and medical decision-making power over them. As soon as they turn 18, however, that responsibility is taken out of our hands, and we lose the power to help them when needed.
This is why as soon as our children turn 18, it’s imperative that we prepare certain estate planning documents for them. These documents include a Medical Power of Attorney, HIPAA (Health Insurance and Portability and Accountability Act) Release, and a Durable Financial Power of Attorney. While we hope we never need to use these documents, we’ll be glad they’re in place should tragedy strike. Imagine your child is admitted to the emergency room, and you are denied access to any information about their well-being because you are not named in a legally binding HIPAA authorization document?
In addition, most young adults are used to us making doctor appointments for them, taking care of their prescriptions, taking care of their financial matters, etc. While the Financial Power of Attorney (depending upon how it is executed) and HIPAA may help us continue to do some things, keep in mind that you will have no authority under their Medical Power of Attorney unless they are deemed incapacitated by two physicians AND you will not have authority to deal with the college on their behalf in many instances. To resolve these issues, a college student should also include in their estate plan two additional documents: i) Authorization and Consent to Release Information Protected by FERPA (Family Educational Rights and Privacy Act of 1974); and ii) Support Decision-Making Agreement.
Think of estate planning as putting on a seatbelt in your car: great to put on before an accident, but next to useless after the fact. Therefore, the following estate planning documents are a must-have for any college student:
Medical Power of Attorney
A Medical Power of Attorney allows your child to name you—or another individual—as an agent who has the power to make healthcare decisions for them if they become incapacitated and cannot make such decisions for themselves. This is what gives someone (most likely you) the authority to make medical decisions if your child is in a bad car accident or becomes severely ill and needs hospitalization. With everything happening in the world right now, this isn’t too far out of the realm of possibilities.
This document will only go into effect if your child were to become incapacitated; other than that, you would be unable to view—let alone talk about—your child’s medical records, because they are considered private under HIPAA laws. This brings us to our next document…
In 1996, Congress passed the Health Insurance Portability and Accountability Act, or HIPAA, which requires health care providers and insurance companies to protect the privacy of a patient’s health records. Once your child becomes 18, no one—not even parents or guardians (and yes, this means you!)—is legally authorized to access their medical records without prior written permission.
However, this is very easily remedied by having your child sign a HIPAA authorization that grants you, or another agent, the authority to access their medical records. This can be critical if you ever need to make informed decisions about your child’s medical care.
Durable Financial Power of Attorney
In order to take care of your young adult’s financial matters, you will also need a Durable Financial Power of Attorney to access his or her financial accounts. If you do not have a signed, notarized financial durable power of attorney beforehand that allows you immediate access to their financial and legal matters, such as paying bills, applying for Social Security benefits, and/or managing bank accounts, or other financial accounts, you’ll have to go to court to get access, which can be a slower process than you will want at that time. Courts don’t move faster simply because you want them to, especially in these times.
Authorization and Consent to Release Information Protected by FERPA (Family Educational Rights and Privacy Act of 1974)
Because your child is now an adult, his/her college will not disclose information to you due to the above-stated Privacy Act. Therefore, a college student’s estate plan should include an Authorization and Consent that allows the student to permit the college to disclose information to identified people, which will usually include you.
Supported Decision-Making Agreement
This document allows your young adult to name who can legally help them with third parties with respect to making everyday life decisions, e.g. obtaining food, clothing, and shelter, taking care of their physical health, and managing their financial affairs.
Additionally, this document specifically states that their named Supporter is not allowed to make decisions for them, but can help them with reaching a decision. In this connection, the document will allow the Supporter:
- Help access, collect, or obtain information that is relevant to a decision, including medical, psychological, financial, educational, or treatment records;
- Help understand options so an informed decision can be made; or
- Help communicate decisions to appropriate persons.
This document will usually attach the HIPAA and the Authorization and Consent to Release mentioned above.
The topic of estate planning isn’t an easy one, especially because no one wants to think about a tragedy leaving them incapacitated or worse. However, it’s a topic to talk over with your children because, as they head off to college or into the world on their own for other endeavors, they will take solace in the fact that you can still provide help in any circumstance. After all, that’s what parents do.
To learn more about how to protect your child when they go off to college, do not hesitate to reach out to the Law Firm of Blanche D. Smith either by calling (936) 301-0111 or using the contact form on our website.