It is back to school time. College parents need to take five minutes to read my blog. This may be the most important action you take about sending your child to college or a gap-year and I doubt it is on your list.
You’re probably busy with last-minute shopping, packing and worrying about roommates. Here’s one more thing you should do as you prepare for the big separation:
Ask your son or daughter to sign a durable power of attorney and a health care proxy.
Why? – The 2:00 AM Telephone Call.
Imagine the phone ringing at 2 AM. The frantic voice on the phone is your child’s friend telling you that your child has been in an accident and is in the ambulance headed to the hospital. Unless you have a Medical Power of Attorney, the hospital or doctor is not required and in many cases, cannot divulge information due to privacy issues. You are here and they are often hours away.
These two estate planning documents, more commonly associated with aging, are essential for younger people too. Without them, in most states parents don’t have the authority to make health care 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 son or daughter is in an accident and becomes disabled, even temporarily, a parent could need court approval to act on their behalf.
The risk is real. Accidents are the leading cause of death for young adults, and a quarter-million Americans between 18 and 25 are hospitalized with nonlethal injuries each year.
After what sometimes seems like endless years spent raising your child, their adulthood—and all the rights that go with it—may creep up suddenly. And much as you hope you’ve prepared them to take care of themselves, you may still be their fall back for emergencies. Getting the necessary authority to play that role can be a rite of passage and a learning experience for both parent and child.
A Durable Power of Attorney appoints a family member, friend or adviser as an agent to act on your behalf, if need be, in a variety of financial and legal matters. These vary by state and can be found online by searching “free [your state name] power of attorney form.”
A Medical or Health Care Power of Attorney authorizes someone to make medical decisions on your behalf. And legally, it also automatically gives that agent access to your medical records. In the same document, or a separate one called the living will, you can express your preferences about end-of-life care. Up-to-date versions of these forms for Texas and other states can be downloaded for free from Caringinfo.org
You don’t have to be a helicopter parent to need either of these documents.
It can be useful in a variety of situations that can arise when children go overseas, either for a gap year or to study. In the case of a financial emergency, having a power of attorney makes it easier to contact the local embassy or wire money from a child’s bank account, for example. It could also come in handy if a parent needs to sign a legal document, such as a lease, in the child’s absence.
College is a time of learning and growth. This is a lesson that can be taught and explained and experienced as you and your child transition in roles from child to young adult.
If you would rather ask an attorney to assist you with these, the cost should be about $350.00 and yes, we can introduce you to a lawyer that can assist you.
Have a great weekend
Michael Tannery CPA CDFA® AIF® ● CEO
Be A Financial Olympian™