Financial Planning Focus – They Grow up So Fast: Things to Consider As Your Child Heads off to College

As your child heads off to college this fall, you will be thinking of many things – housing issues, packing up all of the essentials, setting up bank accounts, registering for classes, etc. One critical part of planning that parents shouldn’t forget is getting important legal documents signed.

Once your child turns 18, they become legally independent private citizens. Parents cannot receive information about their child without the child’s express, written permission and are no longer able to make legal, financial and medical decisions for their now adult children.

There are a number of important legal documents that you and your child should execute before they take off for school. Be sure to keep these documents in a readily accessible place both in paper, in a safe, and in digital format.

A Medical, or Health Care Power of Attorney including HIPPA Authorization
A Medical/Health Care POA allows parents to receive information about their child’s medical condition and to make decisions about their child’s health care. This power is typically used when a child is incapable of making medical decisions for themselves. It is important that this document include HIPPA (sometimes called Health Insurance Portability and Accountability Act) authorization which allows doctors to share medical information with parents. Adult children can stipulate in this authorization exactly what information can, and cannot, be shared. Students might also need to sign a release form that is specific to their college student health center.

A General Power of Attorney
A General-Durable-Financial Power of Attorney allows parents to sign legal documents on their child’s behalf, to access their financial account information, and to make financial decisions acting on their behalf.

Education Record Release
The Family Educational Rights and Privacy Act (FERPA) is a federal law that protects the privacy of student education records. By signing this release a child allows parents to view their grade reports and other educational records.

Domicile
Legal documents are typically prepared and executed in your state of legal residence. To avoid any issues if your child is attending an out-of-state school, it is best to execute powers of attorney from both states.

Other Documents
If your child has significant assets in their own name, they should have a will. Parents should also talk about, and execute, a living will for their child that specifies what medical treatments they want if their condition is terminal.

Lastly, your child should take copies of these documents as well as other important information to school with them such as a copy of their health and car insurance policies, and copies of their passport and birth certificate.
 

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* Any conclusions presented or hypotheticals presented are based upon facts derived from publicly available information, and are also based on certain assumptions, including that there are no additional changes to current law, and that demographic information regarding retirement accounts also remains unchanged. Further, hypothetical scenarios presented are solely presented for the purposes of demonstrating available retirement options, and do not include any information, analysis, or conclusions regarding other areas of an individual’s financial future.

*Certain information presented includes facts and analysis the accuracy of which is dependent upon current regulations regarding taxes remaining unchanged. Changes in tax law or other rules could materially, and adversely, affect any financial or retirement plan. Therefore, no person reading this material should accept this information as investment advice.

*Some information in this presentation is gleaned from third party sources, and while believed to be reliable, is not independently verified.