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As some colleges prepare to reopen in the next couple of months, college students are beginning to compile their to-do lists. If your child is moving into college, you may be helping them gather all the necessary materials, like their bedding and furniture, and perhaps some paperwork they need to fill out beforehand.
The question is, have you thought about the estate planning documents for your college student?
Estate planning is often thought of as something older people need to ensure their (i) health care decisions and assets are managed should they become incompetent and (ii) assets are properly distributed after their death. While this is true, many parents and their children do not realize what happens the day a child turns 18. Legally, the child is now an adult.
If the child does not have certain estate planning documents in place after turning 18, a parent’s right to important information and decision-making ends. This can be quite problematic if a college student has a health event while away at school. However, if your student, upon turning 18, executes proper estate planning documents, he or she can ensure that a parent can step in if they are in need. There are a number of estate planning tools that are beneficial to all adults—young and old. If your college student is at least 18 years old, it is time to consider which estate planning documents they may need to ensure their overall well-being and safety.
You should note, that your child must willingly execute any estate planning documents and that they have complete authority to choose who would serve as their agent(s) if they become incompetent.
Advance Directive & Designation of Health Care Agent
An Advance Directive and Designation of Health Care Agent is an estate planning document that allows you to appoint another person to make medical decisions for you, should you become incapacitated and cannot communicate for yourself. It also allows you to dictate what level of treatment you would like to receive in certain serious health care situations if you are unable to communicate for yourself.
As a part of an Advance Directive, you will designate a health care agent. Your health care agent is the person you trust to apply the wishes in your Advance Directive.
Important Note: A properly prepared Advance Directive includes a “HIPAA Authorization” which allows a medical provider to disclose your child’s health information to the agent. At face value, this may seem like an invasion of privacy. This simply means that if your child was ever to be hospitalized or in need of medical assistance, the medical professionals can contact you to disclose the situation. Without this authorization in place, it can be difficult and potentially impossible to help your child in a time of need.
We recommend that every young adult and college student has an Advance Directive and Designation of Health Care Agent in place to be prepared for any medical situations that may arise. Without this document in place, you may not have the authority to make medical decisions on behalf of your young adult child and may need court approval to act on your child’s behalf.
Financial Power of Attorney
A Financial Power of Attorney is a legal document in which you give a person (your Attorney-In-Fact) the authority to handle financial matters on your behalf. Your financial matters can include—but are not limited to—access and authority over your bank accounts, investments, real estate, retirement accounts, life insurance policies, and other assets. A Financial Power of Attorney can also allow a person to pay your bills and handle your taxes.
We recommend that all college students and young adults have a Financial Power of Attorney so that their financial matters can be addressed if necessary.
Wills & Trusts
In most cases, young adults do not necessarily need a Will because they do not have a significant amount of assets, and those assets are usually passed on to the parents if they pass away. However, if your child has a significant amount of assets and you do not want them to be given to you if they pass, they should consider executing a Will.
If your child is a beneficiary of a trust, we recommend that you (and the child) take the time to review the trust and understand what would happen to the trust assets should the child pass away.
Our team at Sessa & Dorsey understands that the topic of your young adult child becoming ill or passing away is emotional and can be unsettling. However, we believe in the power of estate planning and the peace of mind it can give to your family. By having these documents in place, you will have the reassurance that things will be taken care of should anything happen.
If have questions about estate planning, please contact us at (443) 589-5600. Per Governor Hogan’s Executive Order on April 10, 2020, estate planning documents can be signed, witnessed, and notarized remotely.