Parents have just sent their college students back to school for another semester. Maybe they are helping their kids plan for a semester abroad or a spring break vacation. Find out why that plan should include powers of attorney and other estate planning documents.
In this blog post I will review the different types of Powers of Attorney available to college students in Michigan. I will explain the benefit of estate planning for young adults and how parents can use powers of attorneys to help their children transition to adulthood.
As soon as a college student (or high school student) turns 18, he or she becomes a legal adult. That means society assumes the new adult is responsible for all his or her own affairs. This legally significant birthday also cuts off a parent's access to important aspects of a young adult's life. Most of the time, this coming of age is seamless, but sometimes college students still need help transitioning to adulthood. This help comes in the form of an estate plan.
A young person's estate plan usually won't include a trust or complicated estate distribution. College students in particular often have not accumulated much in the way of assets. But there are several estate planning documents that can help college students today and their parents in the event of an accident:
Each of these documents address different needs while students are in college, and afterward.
A power of attorney authorizes another person to make financial decisions and sign documents on your behalf. It gives that person the ability to access financial accounts, sign legal documents, and pay bills. By giving their parents powers of attorney, college students can get help with everything from budgeting and bill payment to tax preparation.
Financial powers of attorney are particularly useful for college students studying overseas. Just because a young adult leaves the country doesn't mean their financial and tax obligations come to an end. Using a financial power of attorney, the student's parent can meet those needs and let the student focus on getting a good education and a new cultural experience.
Durable powers of attorney for medical purposes (or patient advocate designations) give another person the authority to make medical decisions on your behalf. This could include scheduling appointments or authorizing treatments. Health Insurance Portability and Accountability, or 'HIPAA,' information release forms allow medical providers to discuss your medical situation with another person.
A durable power of attorney for medical purposes and HIPAA forms combine to give a parent the ability to intercede for a college student with doctors, hospitals, and therapists. This could be as simple as scheduling a doctor's appointment during semester break, or as complicated as managing emergency care after a Spring Break accident.
College students aren't generally concerned with their own mortality. Most young adults haven't given much thought to end-of-life care or what should happen to their limited assets after they pass away. But college brings with it an increased level of risk. The unfortunate truth is that college students die every year from binge drinking, auto accidents, and other high-risk activities like sports or Spring Break adventures.
When tragedy strikes, an unprepared college student's family could be forced to go to probate court to get authority to close bank accounts, deactivate social media accounts, and pay off final expenses. A living will, or medical directive, gives hospitals and family members guidance in a young person's last days. Then a will streamlines the process by naming executors and giving direction on the distribution of the college student's limited assets.
Estate planning isn't just for older people. College students need to be proactive, working with an estate planning attorney to draft powers of attorney, medical authorizations, and other documents. By putting these documents in place, college students and parents can make daily living easier, and remove stress if something unexpected happens later on.
Rebecca J. Braun, J.D., is an estate planning and elder law attorney for Mobile Legal Services, PPLC, in Southeast Michigan. She can help with estate planning and trust administration. She will travel to clients, free of charge, in Monroe, Oakland, Washtenaw, Wayne, and Southern Macomb Counties. Contact us for an initial assessment.