As the parent of a college student, you have figured out how everything will fit in the car, purchased a dorm fridge and made sure your young one has all her clothes and sheets. They are now ready for college. Or are they?
Have you thought about the implications that, once your child is 18 years old, he is a legal adult in most states? The age of majority is adulthood as recognized by law, when a minor’s parents (or guardians) cease to have legal responsibilities for their welfare. Your child’s finances and health are their own decision.
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Whether your young adult is off to college, taking a gap year or heading into the work force, this is the time for you to address the inevitable: They are growing up.
They need, at least, a health care power of attorney (HCPA), if not financial power of attorney, as part of their grownup life. Looking at this as a learning opportunity is a way to relieve the pressure on both parent and child when having the conversation.
Since the Health Insurance Portability and Accountability Act (HIPPA) was passed in 1996, everything from privacy of medical records to college records are restricted, even though as a parent you may be a child’s financial support. This is a far cry from your own college years.
If an adult child is hurt and unable to make medical decisions, who would step in? Parents, stepparents and the young adult’s partner are candidates. But whom would they want? That’s why they need a health care power of attorney to save stress and family disagreements.
A health care power of attorney is a legal document allowing another individual to make medical decisions about their care if they are unable to do so for themselves. This important necessity came to light after the Terri Schiavo case in the early 2000s. At the time, medical decisions by a spouse were challenged by her parents. She had not left formal instructions or a health care document, which made this a trying and long case. She was 26 years old when she fell into a coma.
About 17% of young adults end up in the emergency room each year, according to a CDC study from 2016, the last year for which information is available. (Thankfully, the vast majority of cases are non-life-threatening.)
Although an HCPA is easy to put in place, states have different rules and forms. Be sure to follow the instructions for your state. You can learn more from your lawyer or the American Bar Association.
As for a financial power of attorney, most adults at 18 own very little property. Their name may not even be on a car. Your bank accounts may be linked, so financially, they may not need a power of attorney. For ease, getting it done at the same time as the HCPA may be a good idea.
Most likely, you have discussed banking with your child. They have a checking account and a debit card. You may have even provided them with a credit card for emergencies. (You defined emergencies in writing, right?) So this is one more conversation you need to have with them.
I know one lawyer whose son was heading off to college, so she drew up a health and financial power of attorney in July. In August, her son was practicing his independence and still had not signed it. She explained that the documents were for emergencies only. Then she told him: In two weeks, you’ll need a ride to college and money to pay for tuition. I will supply that as we planned. But you need to sign this document. He signed.
In the ideal world, your estate planning lawyer — you do have your documents in order, right? — would offer the documents for each of your children as part of the package when you get yours done. Commonly, the only time this is brought to the forefront is for special needs children turning 18, not for those heading off to the world on their own after high school.
Despite the range of websites and Facebook pages offering support and lists for what to get college students as they head off to college, none mention these important legal documents.
Showing your child that you are taking their transition to adulthood seriously may open up a host of conversations and some mature behavior on their part. At least one can hope. Besides, this is one thing they can leave at home, and you can hope they will never use. So make this happen for peace of mind.
CD Moriarty is a certified financial planner, a columnist for MarketWatch and a personal-finance speaker. She blogs at MoneyPeace.