As children begin or return to college, parents take extraordinary measures to make sure that they are prepared for the experience. From purchasing books, clothes, and computers, parents want to make sure that they send their teenagers to college well-equipped to handle the year ahead. However, many parents do not think about how they should change their estate plan as their children head off to college. These children are now young adults, and likely have completely different needs and maturity levels than they did when they were younger. Parents should review their trust and health care decisions in the event of their death or incapacitation. If you are a parent with college-bound children, consider visiting with an experienced estate planning attorney at Modern Wealth Law at (949) 971-5003 to ensure your legal and financial rights remain protected.
Health Care Directives/ POA for your college student
When your son or daughter becomes 18, by law they are an adult. Therefore, you no longer have parental rights to make decisions for them regarding their healthcare. This becomes an issue if your child is in a situation where he or she is unable to make decisions due to incapacity (e.g. car accident or severely ill).
While many parents think to include how they want their estate divided following their death through a Trust or Last Will and Testament (will), they may not take additional measures to be in a position to make decisions for their adult children if their children become incapacitated as a result of an accident or an injury. In these cases, it is important to have additional documents, including a Health Care Directive or Living Will and a Durable Power of Attorney for your children, which specifies that you have power to make decisions for your children in the event of incapacity.
Without a Health Care Directive identifying you as your child’s health care agent, you have no say in their medical care. In addition, due to HIPPA and other confidentiality regulations, you wouldn’t be privy to any medical treatment your son or daughter is receiving.
Once these documents are completed it is important that copies are stored with family members or other trusted advisors for quick access. Once children are college-bound, incapacity planning becomes even more important, to ensure that your children’s wishes are carried out appropriately.
Setting up a healthcare Power of Attorney before your child goes to college will keep you in the loop with any important medical needs your son or daughter will need once they have turned 18. This will provide some peace of mind for you and your child in the case of a real emergency with the hopes that you will never actually need it.
In the long run, you and your college-age student will greatly benefit from having their Health Care Directive and Power of Attorney documentation in order, especially during times like these.
Legacy Planning for Parents with College-Bound Kids
Parents with college-bound children, especially those who have a blended family, should consider estate planning documents that address legacy planning. While every family will have different needs and circumstances, in many cases, a Living Trust or Family Trust can be used to provide for the needs of the child during this period of life—as well as managing and investing money on his/her behalf.
Parents may also want to consider supplemental trusts such as Education Funding which could help provide for ongoing education costs beyond four years at college. The parents’ ability to control the funds may be important since some children may be impulsive while in college. Additionally, visiting with an experienced estate planning attorney can help parents better understand how their overall estate plan will be taxed by the Internal Revenue Service, and take advantage of certain types of legal documents for their specific circumstances.
Consider Updating Your Life Insurance Policy
Estate planning is not simply about the creation of a Will or Trust. It should be a holistic strategy to ensure the legal and financial wishes of the parents are carried out. As such, parents may also wish to look at the possibility of purchasing (or adding to) a life Insurance policy. If something were to happen to a parent, these life insurance funds could be used for college expenses or would provide financial assets to use later in life as an adult child begins their career and family.
Missing Estate Planning Documents
For many parents, their missing estate planning documents may be the result of believing that nothing bad will ever happen to them. In other cases, parents simply do not know the legal options available to them regarding how to financially protect themselves and their children in the unimaginable event of their death.
However, by not planning now, a parent is jeopardizing the future of their children by potentially causing family discord at the time when they need all parties to work together most.
Consider Visiting with an Experienced Estate Planning Attorney Today
An experienced estate planning attorney can help a parent choose the right options for their situation and motivate them to take action before it is too late. This is often more comforting than trying to sort through options after a tragedy has occurred. Estate planning attorneys also have access to resources that a parent missed or did not consider when they were reviewing financial matters at home by themselves.
Consider visiting with Modern Wealth Law for an assessment with one of our experienced estate planning lawyers at (949) 371-5003. We can help ensure that your wishes regarding your health and finances are protected for both you, as well as your college-aged children.