Sending your child off to college is…well, a huge deal! They are beginning the next phase of their life as they transition from adolescence to young adulthood. As parents, we often hold onto that image of our young child and fail to think of them in adult terms. Doing so can cause us to miss some important financial and legal milestones that need to be addressed. Depending on the state of residence, your child may be considered a ‘legal adult’ as early as age eighteen. Here are three documents you and your child should consider executing:
- Healthcare proxy. This document allows your child to name you as their ‘agent’ for both receiving healthcare information should they become incompetent due to accident or illness and will enable you to make treatment decisions. Typically embedded in this document is the HIPAA Authorization Form, which allows medical personnel to release information to you.
- Living will. The Living Will is a bit more complicated in that your child must answer a series of questions related to the level of care they request should they end up in a vegetative state where they are not expected to recover. Items include such things as feeding tubes, hydration, pain management, and respirators. These are difficult questions for anyone, but especially young adults. They can use their healthcare proxy to give you the final say on medical decisions.
- General and Durable Power of Attorney. With this document, you are named as their ‘agent’ and authorized to act on their behalf in all financial matters. For example, if a child became incompetent due to an accident or illness, you could pay bills from their bank account, renew auto licenses or apartment leases.
Where To Get These Documents
The healthcare proxy and living will, often referred to as Advanced Directives for Healthcare, are drafted by each state. You may download one for your state from The Welchgroup.com Resource Center by clicking on ‘Living Wills – State by State’. Be sure to carefully follow the instructions for witnessing your signature.
For a power-of-attorney document you can visit web-based sites such as Legal Zoom, but I strongly recommend you use your personal attorney. This should not be expensive (typically under $300).
Follow The Welch Group every Tuesday morning on WBRC Fox 6 for the Money Tuesday segment.
FOX6 Talking Points
“College Kids Need These Legal Documents”
- Healthcare proxy
- Living Will
- Power of Attorney
Takeaway: You need these documents; your adult children need these documents; your elderly parents need these documents. Hopefully, no one will ever have to use them.
Stewart H. Welch, III, CFP®, AEP, is the founder of THE WELCH GROUP, LLC, which specialize in providing fee-only investment management and financial advice to families throughout the United States. He is the author or co-author of six books including J.K. Lasser’s New Rules for Estate, Retirement and Tax Planning- 6th Edition (John Wiley & Sons, Inc.); THINK Like a Self-Made Millionaire; and 100 Tips for Creating a Champagne Retirement on a Shoestring Budget. For more information, visit The Welch Group. Consult your financial advisor before acting on comments in this article.