Kids headed to college? You may want them to sign these 3 documents.
- December 6, 2022
- By: Marcos A. Segrera
Estate planning isn’t often at the top of the priorities list when sending your kid off to college. Allow us to shake things up and bring it straight to the top; at least for some quick consideration.
Here’s why: Once your kids turn 18, they are legally adults. Many areas of their life that were once under your control will become entirely their responsibility. For example, if he/she were to get into a serious car accident and require hospitalization, you would no longer have the automatic authority to make decisions about their medical treatment or the ability to manage their financial affairs. Without legal documentation, you wouldn’t even be able to access your child’s medical records or bank accounts without a court order.
To deal with this vulnerability and ensure your family never gets stuck in a potentially expensive and unnecessary court process, have this conversation with them and your estate planning attorney. Specifically, you may want to draft the three documents below. 2 out of 3 fall under the headline of “Advance Medical Directive”.
The term “Advance Medical Directive” is often used synonymously with a “living will”. Although a living will is an advance medical directive, it is not the only one.
1. Medical Power of Attorney
A medical power of attorney, also called a healthcare power of attorney, is a type of advance medical directive that allows your child (the principal in this case) to establish an agent (you or someone else) the immediate legal authority to make healthcare decisions on their behalf if they become incapacitated and are unable to make these decisions themselves.
For example, a medical power of attorney would allow you to make decisions about your child’s medical treatment if he or she is incapacitated for any reason. Without a medical power of attorney in place you’d have to petition the court to become their legal guardian while they are in the hospital. While a parent is typically the court’s first choice for a guardian, the guardianship process can be slow and expensive.
It is very important that your medical power of attorney include a Health Insurance Portability and Accountability Act Authorization and Release (HIPPA). Rolls off the tongue, no? Due to HIPAA laws, once your child becomes 18, no one can legally access their medical records without prior written permission. However, a properly drafted medical power of attorney will include a signed HIPAA authorization, so you can immediately access your child’s medical records.
2. Living Will
The primary function of a living will is to allow the principal (your child in this case) to express preferences regarding life-sustaining treatment if they are pronounced terminally ill, permanently unconscious or in a vegetative state and are unable to make decisions for themselves. These preferences technically bypass the agent in the medical power of attorney and are communicated directly to the health care provider.
For example, and to be specific, a living will allow your child to advise if and when they want life support removed should they ever require it. In addition to documenting how your child wants their medical care managed, a living will can also include items such as instructions about who should visit them in the hospital and what kind of food they would want to be provided.
3. Durable Financial Power of Attorney
If your child becomes incapacitated, you may need the ability to access and manage their finances and legal affairs. This requires your child to grant you durable financial power of attorney. Durable financial power of attorney gives you the authority to manage their financial and legal matters such as applying for student loans, paying their rent, negotiating a lease, managing their bank accounts, and collecting government benefits if necessary. Without this document, you’ll have to petition the court for this authority.
Want to discuss in more detail? We are always happy to chat but highly suggest having this conversation with your estate planning attorney. While unpleasant to discuss, these are items you would rather have and not need than need and not have.
Happy planning,
Marcos
PS – Is estate planning on your mind? These checklists can prove helpful.
- What Issues Should I Consider Before I Update My Estate Plan
- What Issues Should I Consider When Reviewing My Estate Planning Documents
PSS – In case you're curious, here are the four documents that are considered an “Advance Medical Directive”:
- Medical or Healthcare Power of Attorney
- Living Will
- Do No Resuscitate Orders (DNRs)
- Health Insurance Portability and Accountability Act Authorization and Release
