College students live in a kind of independence limbo. They don’t live with their parents for most of the year, and they take care of their own daily needs, but many of them are still financially dependent on their parents and rely on their guidance. They certainly THINK that they are adults and, if they are 18 or older, they are legally adults. As a parent, you have to navigate this tricky territory as you pay their tuition and room and board, and they come and go from your home. One way you can make this transition easier on all of you is to ensure that your college student has a few important legal documents in place before they head off to campus.
You might think that Estate Planning is only for older people with significant assets and families, but we advise our clients with teens to talk to us about executing some important papers before they leave for college. And if you are a young adult with your own assets, it’s even more important that you have plans for those assets should something unexpected happen to you.
Talk to an Estate Planning Lawyer About Executing These Documents
Depending on the specific circumstances, an Estate Planning professional might recommend that college students have some or all of the following documents and Estate Planning tools:
- Financial Power of Attorney. This is a legal document that appoints someone you trust as your agent to make financial decisions on your behalf if you become incapacitated. In the event of an accident or illness that leaves you unable to manage your finances, a financial Power of Attorney allows someone you choose to handle financial matters, pay bills, and manage your assets. This might be your parents, but it can be any adult you choose.
- Health care Power of Attorney. This document designates a trusted person to make medical decisions on your behalf if you are unable to do so. If you are incapacitated and unable to communicate your health care preferences, a health care power of attorney ensures that someone you trust can advocate for your medical needs and treatment options.
- Advance health care directive. By outlining your preferences for medical treatment and end-of-life care in specific situations, this document will guide your health care agent and medical professionals in making decisions that align with your values and wishes, particularly when facing life-threatening or end-of-life situations.
- HIPAA authorization. Once you turn 18, your parents will no longer have access to your medical information, and doctors will not be able to talk to them if you are incapacitated. This document authorizes the agents you choose to access your protected health information (PHI) under the Health Insurance Portability and Accountability Act (HIPAA).
- Digital Estate Plan. This is a plan that addresses the management and distribution of your digital assets, such as email accounts, social media profiles, online photos, and other online accounts. In the digital age, it's crucial to have a plan for your digital assets. Your digital estate plan should include instructions on how to access and manage these accounts if something happens to you.
- Will. Even as a college student, you may have bank accounts, personal belongings, digital assets, or even a pet that you'd want to pass on to specific individuals or charities. Creating a Will ensures your wishes are carried out and prevents potential conflicts among your loved ones.
While, as a college student, you may not have significant assets, Estate Planning is still important for ensuring your wishes are respected and that your loved ones are supported during challenging times.
When Would a College Student Need a Revocable Living Trust?
If you have significant assets in your name, establishing a Trust to hold those assets could have tax and financial aid benefits. If you are the beneficiary of a Trust established by your parents or grandparents, or you are due to inherit a significant amount of money upon the death of a parent or grandparent, you should have an Estate Plan designed to manage those funds. It is unlikely, but if you were to die or become incapacitated shortly after inheriting significant assets, and you don’t have a Will, the state would determine what happens to your assets. It’s best to prevent that possibility.
