College is typically considered a first step toward adulthood. The truth is that even healthy people find themselves in unfortunate circumstances. Your college student could end up in a situation where he or she is unable to make health or financial decisions. This is where an estate plan comes in handy. If you are a parent, you should be encouraging your adult child to pursue an estate plan for three important reasons:
1. Your child needs a medical power of attorney and living will.
A medical power of attorney is the person appointed to make health care decisions in the event that your child experiences a debilitating accident or illness. The living will is also a document that details the life-support measures that your child would like to be followed in the event that he or she is not expected to make a recovery. These documents should be written up by an attorney in your child's state of residency, as laws differ from state to state.
2. Your child needs to understand a HIPAA release form.
You may be familiar with HIPAA, the Health Insurance Portability and Accountability Act, which is intended to ensure that every adult has sufficient privacy surrounding medical information. This means that you will not be able to receive information about your child's health unless he or she has authorized a HIPPA realease. Your child has the choice to put any person they want on this form, including a spouse, father, mother, sibling, or even a lawyer.
3. A durable power of attorney is important too.
In some cases, your child may decide that he or she wants you to act as a financial agent on their behalf. This would mean that you could write checks for your child, using his or her account, if they are unable to do so. This also makes it possible to pay bills if necessary. Of course, this is the time for freedom and newfound adulthood. An adult child in college should be able to handle the burden of finances, so long as they are medically capable.
An estate plan is so much more than a last will and testament. This is one of the biggest myths associated with estate planning. Like an adult with many assets, a college student needs to create a solid plan. It is always in your child's best interest to create a plan for the future.
