By Jeff Deiss, CFP, AEP, Wealth Advisor
Original Content by ACM Wealth
There are plenty of articles on what your child should bring with him/her to college, how to decide on a major, and even how to deal with a new roommate, but nobody ever talks about what happens when things go wrong. Before your child heads off to college this fall, sit down and create a plan for handling medical emergencies and other unexpected obstacles.
Once a child turns 18, parents can no longer make decisions or respond to inquiries on the student’s behalf. The question is, what happens when legal, health and financial issues arise while the student is away at school, or studying abroad, and the parents can’t address them because the student is no longer a minor.
Since I first wrote this a few summers ago, a friend’s college-age daughter went from a thriving co-ed to homebound after a concussion from working at a local retail store.
In hindsight, a seemingly routine situation was quickly complicated by the fact that the parents had no access to their daughter’s medical records and no control over the situation. Their child’s condition was serious and she was not able to understand what was happening and not in a condition to make decisions about her own health.
The nightmare of pondering the future health and well being of their daughter remains a daily dilemma. And as this process has continued, the daughter’s not returning to college in a timely manner ultimately cut the financial aid for the upcoming year for their younger son.
It typically does not cross our minds whether we have the right to know information about our own children, particularly when they are still covered under our insurance plan. The hospital above will be happy to take your payment, but it will not release any test results or information about treatment. This may be particularly stressful if college is somewhere far away and, god forbid, if any critical medical decisions are necessary.
Your instinctive reaction may be to contact your child’s school, the one to which you are paying big bucks, in order to get some information or to let professors know that your child is in the hospital, but you will likely just become more frustrated as you will find that student information is also unavailable to you.
Even if you are paying for your child’s education, under the Family Educational Rights and Privacy Act (FERPA), colleges may not release student information, including grades, to individuals other than the student. Rules vary from one institution to the next, but parents are not party to the agreement between the school and the student and many schools will not disclose grades without a student’s permission.
It doesn’t take something nearly as drastic as a hospital stay for parents to need to act on a child’s behalf. Beyond the important information that may be needed from medical providers and the college itself, there are a variety of other situations where the ability of a parent (or someone else) to act on the student’s behalf may be helpful:
- Signing a lease
- Contacting an overseas embassy when studying abroad
- Wiring money from a child’s bank account
- Renewing a passport
- Renewing a driver’s license, or car registration
- Legal and/or insurance issues from auto accidents
- Completing financial transactions at a bank
- Filing and paying taxes
- Even responding to a jury summons
Advance preparation to help, even with everyday tasks, prevents a student from having to miss school, particularly when your child may not be able to travel from college to home on short notice should a legal or financial matter arise.
So while you’re busy with the last-minute shopping, packing and worrying about roommates, here is one more thing to add to your “to-do” list as you prepare for the big separation: Ask your child to sign a general durable power of attorney and medical power of attorney.
These two estate planning documents, which are more commonly associated with older folks, are essential for younger people too.
Durable Power of Attorney: A legal document (contract) where an individual grants power to another to act on their behalf (in this case one or both parents acting on behalf of their child). A properly executed durable power of attorney will allow parents to help with everyday tasks and any important legal or financial matters that may arise.
Medical Power of Attorney and HIPAA Release: A similar legal document that authorizes an individual (one or both parents) to make medical decisions at any time or only after your child is incapacitated (depending on the laws in your state). The Medical Power of Attorney on its own does not grant authority to you unless your child is incapacitated. So it’s important to have HIPAA Release language as part of the Medical Power of Attorney or in a separate document signed by your child. The HIPAA Release is critical for hospitals, physicians and other medical providers to be able to share diagnoses and treatment options with you.
If you want to take the issue of medical decisions to another level, then sit down and have a serious discussion with your child about organ donation, extreme care (life support) and other medical concerns to determine what he/she would want in terms of care during a medical emergency. Fairly common for adults, these issues are addressed in a separate document commonly known as a “living will” or “healthcare directive”.
Don’t forget authority to access digital assets:
- Computers, devices and Email Accounts
- Social Media (Facebook, Instagram, etc.)
- Online music and gaming accounts
- Online banking and credit cards
How do I do this?
Power of Attorney documents are available through a variety of sources. If you want to create an “adult” education experience for your child, then introduce them to your attorney or ask them to do some research on their own. Preparation of these documents by an attorney should cost less than $500, which is likely to be money well spent.
If you want to do it yourself, you can find free General Power of Attorney forms online. Just be sure to check with your child’s financial institution to see if it requires a specific form, as some do.
All of these documents are state-specific so please be sure to check and make sure that the forms you execute conform to the state in which your child resides.
How to get your children to sign these documents, especially if they consider themselves invincible, or are still in the stage of thinking Mom and Dad are clueless about practically everything, may take some gentle persuasion. Worst case, and particularly if you want to be able to control in-network vs. out of network provider choices, then you make it a condition of your paying the tuition!
Depending on the nature of parent/child relationships and other family dynamics, situations may also exist where you’re recommending these important documents or acting on their behalf may not be practical. In these cases, consider who else could serve this role – a sibling, another relative, or even a friend – but don’t avoid this important part of college preparation.
After what sometimes seems like endless years spent raising a child, their adulthood—and all the rights that go with it—may creep up suddenly. And much as you hope you’ve prepared them to take care of themselves, you may still be their fallback for emergencies. Getting the necessary authority to play that role can be a rite of passage and a learning experience for both parent and child.
ACM is a registered investment advisory firm with the United States Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. All written content on this site is for information purposes only. Opinions expressed herein are solely those of ACM, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful. ©ACM Wealth