Believe it or not, the summer is more than half over for most students across the U.S. Whether for the first time or a return engagement, that means getting serious about loading up the car with school supplies, furniture and clothing in preparation for heading off to college.
There are many schools of thought as to how much support, financial and otherwise, parents feel they should provide. Regardless of where you fall along that spectrum, most parents agree they at least want their young adult to have the tools they need to be safe.
More and more laws are in force that make it difficult if not impossible for a parent to share responsibility with a young adult when it comes to health care, legal & financial matters and educational records. While there may be differing opinions on how much, most parents and students desire some level of shared access. There are mitigating planning steps most parents and children either aren’t aware of or don’t place a priority on taking care of as a child turns 18.
Let’s take a look at the three primary impact areas, the issues involved, and the relatively simple steps that parents and young adults can take as part of a thoughtful estate plan to ensure that their true intentions are met in taking those first meaningful steps into adulthood.
Most of us have heard of HIPAA, the Health Insurance Portability and Accountability Act, that sets rules around what medical information can be shared. Most of us have not, however, considered the impact of the Act on our young adults. Even if you provide for the students’ health insurance or they are your dependent, you may not have the right to receive updates on their status or the ability to make important decisions as to their care or well-being if a medical emergency occurred. Whether the simple release of medical records or making life altering decisions for a student in a non-responsive state, rules around privacy can make an already difficult situation that much more stressful.
Legal & Financial Matters
This can cover a wide array of scenarios, but the basic message is the same. A parent’s ability to intervene in even routine affairs often ends at that 18th birthday. Whether your student simply needs money transferred from a home account to another or has a legal situation that requires significant counseling or assistance, becoming an adult can make a parents’ access to assist that much more difficult.
Similar to HIPAA, the Family Educational Rights and Privacy Act (FERPA), was put in place to specify privacy rights over a students’ educational records. Here again, once a student turns 18, the bulk of the control is put in their hands. For many parents, especially those footing the bill for much of the child’s support, there’s an expectation that they have a right to see grade reports or potential disciplinary issues at the child’s university. In many cases, without express permission of some kind from your child, you could be blocked from these activities.
These are significant issues that parents and students need to discuss and come to some understanding as to how the transition from dependent to young adult will go and what expectations will be on both sides. To avoid many of the scenarios above, contact your estate planning attorney and ask about the following documents.
- Durable Power of Attorney - this will allow a parent to take any legal or financial action on the students’ behalf
- Health Care Power of Attorney - this will allow a parent to communicate with doctors, hospitals and other medical staff and to direct medical care in the event the student is unable
- Living Will - this authorizes the parent to terminate life support based on criteria the student sets in the document
- HIPAA Release - this form allows a parent to communicate with medical personnel without any privacy issues. It is not as sweeping as the powers given in the health care power of attorney.
- FERPA Release - many universities will have their own version of this form readily available in their administration offices. It gives parents the right to inquire and view a students educational records.
While somewhat of a daunting list, most of these documents can be drawn up by an estate planning attorney using very basic language for relatively low cost. It might be a good time to do this while parents update their own estate plan as well.
These basic steps are a great way to add a layer of protection and ensure that your child is able to learn the ropes of adulthood and earn their education while not having potentially unwanted outcomes looming in the event of an emergency.
Chip Workman, CFP®, MBA
The Asset Advisory Group