Sending a child off to college marks a significant milestone in both the student's and the parents' lives. It's a time of excitement and change, but it also requires careful planning to ensure a smooth transition. Most parents get caught up with the financial, academic, and social aspects of their children attending college. How will we afford it? Will my child be able to handle the workload of college courses? How will they handle the social aspect of college?
This approach is reasonable as these are all significant topics to consider as your child embarks on higher education – but it is important to keep in mind that your child is now an adult and your legal authority to make decisions on their behalf no longer exists. The law considers adult children capable of making their owns decisions and permits them full legal privacy. Without the proper documentation in place, a parent will encounter hurdles trying to access medical or financial information in case of an emergency.
The first planning item to explore is a Durable Power of Attorney. This legal instrument grants someone the authority to manage financial and legal affairs on behalf of an individual, in this case your adult child, should they become incapacitated or unable to handle these matters themselves. College students find themselves juggling various financial responsibilities, from managing bank accounts to paying bills and handling financial aid. In the event that a student become incapacitated due to illness or accident, having a designated person with durable power of attorney ensures that financial matters can be managed in their absence. This will avoid the necessity of court intervention as this legal document will provide clear instructions on who has the authority to handle these decisions, reducing the stress and potential conflicts that can arise from uncertainty.
The next critical documentation to put in place is a Healthcare Proxy that gives the parents of children 18 years or older health care information impacting their child. Without permissions, doctors cannot share information because of the regulations under the federal HIPAA (Health Insurance Portability and Accountability Act). This legal document also grants someone the authority to make medical decisions on behalf of an individual if they become unable to make those decisions themselves. Life is unpredictable, and health situations arise unexpectedly. From accidents to sudden illness, having a healthcare proxy in place ensures that someone familiar with the students wishes and values can make the decisions aligned with their best interest and eliminate any ambiguity. While a parent never wants to be in this situation, it’s a proactive step that demonstrates care and responsibility toward the well-being of their child even as they venture into independence.
Having these two documents in place creates health and financial synergy so there is a comprehensive safety net in place for college-aged kids. While the healthcare proxy addresses medical decisions, the durable power of attorney takes care of financial and legal matters. Together, these legal documents ensure that key aspects of a student’s life are covered in case of emergencies. Working with your attorney, your child’s needs can be customized to be flexible where their desires and wishes can be broad or very specific. You may also want to think about including provisions into the power of attorney document which account for digital assets encompassing content of electronic communications or access to social media sites. Each one of these documents can be drafted by your attorney and can also be made to be effective only for a certain period of time, such as for the four years of your child’s college career.
The final item to address, while not as critical, is navigating the Family Educational Rights and Privacy Act of 1974. This is a federal law that protects the privacy of student education records, such as their grades and financial aid information. A FERPA waiver gives parents full access to this information and we suggest you discuss this with your child and their college.
Transitioning to college is a monumental step towards independence, but it is essential to remember that young adults may still require assistance and guidance, especially in legal, financial, and healthcare matters. While addressing these items can feel overwhelming, they are the last thing you want to worry about during an emergency. Work with your financial advisor or a legal professional to help you navigate the complexities of these documents, so you have a plan in place when it matters most.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation. LPL #471475
About the Author
Bleakley Financial Group
For over 35 years, Bleakley Financial Group has been providing customized financial planning and wealth management services to a diverse array of clients across the country. Our team consists of more than 100 financial professionals, from financial advisors and research assistants to client support associates. Bleakley services over $8.4 billion in client brokerage and advisory assets across four different custodial platforms.