This is an exciting time for many young adults. High school is now over and the dream of moving out of mom and dad’s house and going to college is quickly becoming a reality.
Before they spread their wings and leave the nest, however, you should make sure that your newly minted high school graduate is equipped with a few essential estate planning documents.
Statutory Durable Power of Attorney: Ideally, this document would appoint the student’s parents as the student’s agents (either as co-agents or in succession) for purposes of acting on the student’s behalf for certain financial and/or legal matters. This will allow the student’s parents to take care of any bills or other financial obligations of the student in the event they become incapacitated. One thing to be aware of is that the Statutory Durable Power of Attorney can be made effective either immediately or only upon the student’s subsequent disability. It is important to understand that if the power of attorney is made effective only upon the student’s subsequent disability then the parents will not be able to utilize any powers under the durable power of attorney until a physician has certified in writing that the student is incapacitated and unable to manage their own financial affairs.
Medical Power of Attorney: The purpose of this document is to ensure that the student’s parents are able to make a medical decision for their child in the event the child is incapacitated or otherwise unable to make a medical decision on their own. It is important to understand that the agents power under the medical power of attorney only becomes effective in the event of the student’s incapacity (i.e. the law is clear that if an adult is mentally competent to make a medical decision then no agent named under a medical power of attorney can usurp the competent adult’s ability to make their own medical decision).
HIPAA Authorization: This document works hand-in-hand with the Medical Power of Attorney discussed above. With the complicated HIPAA laws in place doctors are limited in to whom they can release a patient’s sensitive medical information to. That being the case, this document ensures that the doctors are able to discuss the necessary medical information with a patient’s agent under a medical power of attorney document. This, in turn, ensures that the agent is able to make the best and most informed medical decision possible.
With these three documents in place, your student can be sure that someone will always be ready, willing and (perhaps most importantly) able to act on their behalf in the unlikely event they become unable to do so themselves. These documents are easy and inexpensive to prepare, and you should be sure to discuss them with your college-bound student and your estate planning attorney before your student heads off to give it that old college try.