After what sometimes seems like endless years spent raising a child, their adulthood—and all the rights that go with it—may creep up suddenly. When you are about to send a child off to college or to a study abroad program, you’re probably busy with travel arrangements, last-minute shopping, packing, worrying about how your baby will fare living away from home, and wondering what the future holds for your child. All of these things are important, and need to be considered and attended to in preparing a child to go off to college.
And much as you hope you’ve prepared your children to take care of themselves, you may still be their fallback for emergencies. Getting the necessary authority to play that role can be a rite of passage and a learning experience for both the parent and the child. So, here’s another thing you should do as you prepare for the big step of sending a child off to college: Have your child to sign a durable financial power of attorney and a medical or health care power of attorney (also called a health care proxy).
These two estate planning documents, more commonly associated with older people and the elderly , are essential for younger people living away from home too. Without a medical power of attorney and financial power of attorney, parents don’t have the authority to make healthcare decisions or manage money for their kids once they turn 18—even if they are paying the tuition, still have those kids on their health insurance plans and claim them as dependents on their tax returns. That means if your child is in an accident and becomes disabled, even temporarily, you, as a parent, might need court approval to act on his or her behalf.
This is a real risk. Accidents are the leading cause of death for young adults, and a quarter-million Americans between 18 and 25 are hospitalized with non-lethal injuries each year.
A Short Story
But it doesn’t take something nearly that drastic for parents to need to act on a child’s behalf. When I was in college, my freshman year roommate worked at a job in food service. One day he was working and a large vat of hot water spilled on his feet, burning them. He ended up with second degree burns on the top of his feet. His parents called the hospital to discover what was going on with his treatment, but the doctors refused to discuss my roommate’s condition, citing privacy concerns and HIPAA laws that prevented them from discussing private health information of their own child.
Fortunately, my roommate recovered and was able to complete his schooling that year. But the temporary scare to his concerned parents could have been avoided if he had signed a medical power of attorney before he went off to college. The medical power of attorney would have authorized his parents to discuss medical matters with the doctors and hospital. If a health insurance information and HIPAA information is included in the medical power of attorney, then the medical power of attorney will also give the agent access to your medical records. A HIPAA waiver is an important part of a power of attorney, or an overall estate plan, to allow an agent under a power of attorney to access private medical information.
Not for my roommate’s situation, but generally a good idea, is to have your child sign a durable financial power of attorney. A durable financial power of attorney appoints a trusted family member, friend or adviser as an agent to act on your behalf in a variety of financial and legal matters. The power of attorney may be effective from the moment your child signs it or you can specify that it be activated by a specific event—for instance, if your child becomes incompetent. There are benefits and drawbacks to each approach, but the problem with the approach of having an event turn the financial power of attorney on, is that someone must decide when an individual has reached that state. Traditionally, this has required a medical opinion.
Though you, as the parent, is usually the best person to put in charge of both medical and legal matters, that does not always have to be the case. Your child can appoint a different trusted adult or family member as the agent. It’s also important to name an alternate in case, if the time comes, your child’s first choice is unable or unwilling to serve.
Many people are wary of signing a power of attorney, since it gives unbridled authority to an agent. While the elderly tend are often concerned (sometimes with good reason), about people stealing their money, for college students there is another risk: that their parents will be unable to find out their grades. Though parents often pay for tuition, they are not automatically entitled to discuss grades with the college or university. Rules vary from one institution to the next, but many schools will not disclose grades without a student’s permission. A power of attorney, which gives an agent the right to enter into, renegotiate or amend contracts, can also be used to access an academic transcript.
Signing Strategies: Protective, but Not Overbearing
But you don’t have to be a helicopter parent to need a power of attorney. It can be useful in a variety of situations that can arise when children go to college, overseas, either for a gap year or to study. In case of an emergency, having a power of attorney makes it easier to contact the local authorities, or proper individuals or institutions, to discuss your child’s situation. A financial power of attorney could also come in handy if a parent needs to sign a legal document, such as a lease, in the child’s absence.
How can you get your children to sign these documents, especially if they are still at the stage of thinking Mom and Dad are clueless about practically everything? In my experience, gentle persuasion works best. Another possibility is to make it a condition of your paying the tuition or buying your child a car—if that’s something that might work for you and your situation.
Another good, less threatening, option is to ask a lawyer to prepare this back-to-school package, meet briefly with you and your child and explain the significance of the documents, and get them signed. That is where we can help. If you want to set up an appointment to discuss setting up powers of attorney for a child off to college, or a study abroad type of situation, go here.