As our children grow into young adults and prepare for college, their journey towards independence becomes a priority. However, it’s crucial to consider their legal and financial well-being, especially since parents no longer have legal authority over their children once they reach the age of majority. Estate planning may not be the first thing that comes to mind when thinking about college, but it is an essential step in ensuring your child’s future.
Why Estate Planning Matters for College-Bound Children
- Protecting Health Care Decisions: Once your child turns 18, they become legal adults, and you no longer have the authority to make medical decisions on their behalf. You do not even have authority to receive medical information about them. Having proper planning in place can ensure that your child’s medical wishes are honored and that someone they trust can act as their advocate in case of an emergency.
- Managing Finances: College brings new financial responsibilities, and it’s important for your child to have a plan in place to manage their finances effectively. If your child were unable to act for themselves during time of illness, after an accident, or while away on a trip, it is important that they properly authorize a trusted individual to handle financial matters on their behalf. Should they need your assistance in matters such as paying bills, accessing bank accounts, or signing leases, they must grant you legal authority.
- Protecting Digital Assets: In today’s digital age, it’s crucial to address the management and disposition of your child’s digital assets. These assets may include social media accounts, email accounts, online banking, and intellectual property. Ensure your child has a plan to grant access to their digital assets and specify their preferences for preservation or deletion in case of incapacity or death.
Key Components of Estate Planning for College-Bound Children
- Healthcare Power of Attorney: Your child should designate someone they trust as their health care agent to make medical decisions on their behalf if they become incapacitated. This document ensures that their medical wishes are followed and allows their chosen representative to communicate with healthcare providers. In addition, in this document your child can express their preferences regarding medical treatments and end-of-life care if unforeseen conditions arise. The Healthcare Power of Attorney guides medical professionals and your child’s designated patient advocate in making decisions aligned with their wishes.
- Financial Power of Attorney: Encourage your child to establish a financial power of attorney, authorizing a trusted individual to handle financial matters on their behalf. This person can assist with bill payments, managing bank accounts, and other financial responsibilities during times of incapacity, periods they are away, or at any time they need assistance.
- Digital Estate Plan: Your child should create a digital estate plan that includes instructions on how to access, manage, and handle their digital assets. This plan should provide access details for online accounts and specify their preferences for preserving or deleting certain digital assets.
- Will or Trust: A living trust may be considered as a way to manage accounts or assets on your child’s behalf if they were to have an accident or illness and be unable to take care of things themselves for a time. A will or a living trust could be established to direct distribution of any assets in case of an untimely death. Rather than relying on state law that would control if there were no plan, a will or trust would direct that their belongings be distributed according to their wishes.
As your college-bound child steps into adulthood, estate planning becomes crucial for their legal and financial protection. By addressing healthcare decisions, finances, and digital assets, your child can have a comprehensive plan that ensures their well-being in various situations. Schedule time with us and let us guide you through the process of creating a plan tailored to your child’s specific needs. With proper estate planning in place, your child can embark on their college journey with confidence and peace of mind.