Beyond The Will, Client Compass

Basic Estate Planning Documents for the College-Bound

August 2, 2023


If you are the parent of a recent high school graduate who is preparing to head off to college this month, expand your to-do list beyond shopping for dorm room essentials and consider meeting with an estate planning attorney who can prepare a basic set of documents for your child before they set out into the world. Though estate planning is often thought of in the context of planning for your assets after death, several documents can be indispensable while living and give both children and parents some peace of mind.

Basic Documents Every College Student Should Have

Power of Attorney. A power of attorney is a document that allows one person (the principal) to appoint another (the agent, called the “attorney-in-fact”) to handle legal affairs on the principal’s behalf. The document outlines the specific authority granted to the attorney-in-fact and can be quite comprehensive, including such financial and business powers as the power to manage real property interests, power to manage and access digital assets, power to manage and access financial information, power to operate businesses, power to make gifts of the principal’s assets, or the power to create or amend a trust. The scope of powers granted in a power of attorney is entirely customizable. It can even be limited to a specific transaction for which the principal will be unavailable to participate directly.

A durable power of attorney is often preferred because it remains effective in the event the principal lacks legal capacity. In this way, the document can often avoid the need for the family to petition a court to appoint a guardian or conservator for an incapacitated person. However, if court appointment of a guardian and/or conservator becomes necessary for broader management of the principal’s personal or financial well-being, these fiduciaries may be nominated directly in the durable power of attorney document for the court’s consideration.

The principal must also decide when the power of attorney document will become effective. A power of attorney may take effect immediately upon execution by the principal or only upon a showing of the principal’s incapacity (generally referred to as a “springing” power of attorney). Clients are often more comfortable with the idea of a springing power of attorney. Still, they should be aware that their attorney-in-fact will have to undertake the task of demonstrating incapacity in the manner specified in the document, which typically requires examination and written findings of one or more physicians. For young adults wanting to permit a parent to assist them as they embark upon financial independence and have a backup plan for unexpected emergencies, a durable power of attorney that is effective immediately upon signing is often recommended.

Health Care Proxy. A health care proxy, or another form of advanced health care directive, allows a person (the principal) to designate an agent to make health care decisions for the principal in the event they cannot make or communicate these decisions. The provider of medical care determines whether the principal has the ability or capacity to make the medical decisions required at that time.

A health care proxy allows the principal to set forth their wishes concerning end-of-life care, such as the use of life support or other interventions to be resuscitated or kept alive. While difficult for a college-age student to contemplate, these important decisions can alleviate much of the burden placed on loved ones during medical emergencies. Ancillary documents like a living will or a “Five Wishes” form, while not legally recognized in all states (like Massachusetts), can facilitate discussion and provide the health care agent with additional context around the principal’s wishes.

HIPAA Authorization. The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is a federal law that protects one’s privacy in their medical records and health information. A HIPAA authorization permits one’s health care agent, attorney-in-fact, and/or other designated individuals to access their medical records and information and to discuss their medical care.

FERPA Authorization. The Family Educational Rights and Privacy Act (FERPA) is a federal law that protects one’s privacy in their education records. The law gives parents certain rights concerning their child’s education records, which transfer to the child (the student) at age 18. A FERPA authorization allows a school to disclose and discuss education records with the parents of an adult student. Schools often have their own preferred form for this purpose.

Deciding on Agents

Most young adults will choose one or both parents to serve as attorney-in-fact and health care agent, but there may be considerations such as geographic location, parent’s age, health, or other interpersonal reasons to consider other individuals. Any person the principal trusts to act in their best interests and with whom the principal is comfortable discussing their wishes may be a good candidate.

Keep in mind that more than one person can be named to serve as an agent, either together or in succession. However, principals should consider naming only one health care agent to serve at a time to avoid the possibility of a stalemate during a medical emergency; some states require this. Whoever is chosen should always be asked if they are comfortable with the responsibilities of the role for which they will be appointed.

Additional Considerations

If your college-bound kid is heading out of state, be sure to communicate this to your estate planner. Different states can have different requirements or limitations for power of attorney and health directive documents, often dictated by statute, and it is good practice to have documents compliant with the laws of the state of one’s permanent domicile as well as one’s current residence.

Each of these documents can be amended or revoked in their entirety at any point as long as the principal has legal capacity. In fact, regularly reviewing and revising these documents every few years, or more frequently in the event of a significant change in personal or financial circumstances, is advisable to keep them current with your wishes. Equally important is to understand that these documents will have no legal effect once the principal dies, and they are not appropriate vehicles for estate planning after one’s death. Seek a knowledgeable estate planner who can guide you through the various documents and strategies available to meet your short- and long-term planning goals.

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