With new college-bound co-eds soon departing for their first semester away from home, estate planning documents are not likely at the top of any list for dorm room necessities or school supplies.
However, there are several essential planning documents they – along with all young adults – should consider executing as they enter adulthood. Importantly, with these key documents, young adults can have better control of the people who can make decisions in their lives.
Parents, too, may be keen on having their young adult execute these documents because parents no longer have complete access to their child’s financial, education and health records, even if the parents are paying the bills.
Here are two key documents to consider:
Durable Power of Attorney. This document allows a person, a Principal, to appoint another trusted person, an Agent, to make financial decisions and transactions when the Principal is unable to handle those decisions or transactions for himself.
In many cases, the Principal can set up certain contingent circumstances that trigger the Agent’s authority to act. This document can allow an Agent to communicate with financial institutions, work with scholarship providers, or manage tuition and school-related expenses.
If a Principal plans to travel abroad, this document can give the Agent authority to work with airlines for travel plans, wire money overseas, sign a lease or other contracts in the student’s absence, or speak with credit card companies if there are suspicious charges on the student’s account.
Even if the co-ed is a dependent on parents for tax purposes and parents are paying tuition for their student, without this legal document, a parent has no authority to communicate with these entities or the school about the student’s finances.
Health Care Power of Attorney with Advance Directives. This document allows the Principal to appoint a trusted person to make health-related decisions when the Principal cannot make or communicate those decisions.
In addition, advance directives allow the Principal to outline his or her wishes for receiving or refusing life sustaining care under certain circumstances.
This document offers a young person control over who makes medical decisions on their behalf and identify what health decisions should be made. The document also offers peace of mind that the young person’s wishes will be followed.
Besides the fact that these documents pose very grown-up decisions about financial and health decisions, these documents could save loved ones money and anguish in the event of an unfortunate accident that renders the young adult incapacitated.
Without these two documents, if a student is in an accident and becomes disabled, a parent may be forced to petition the court system for guardianship over the student in order to make some of these same choices.
Not all young adults need a Will unless they are lucky enough to own their own assets individually. Without a Will, under North Carolina’s intestacy law, if a person dies without a spouse or children, then the person’s parents may stand to inherit the estate.
With a young adult who predeceases a parent, the parent’s unexpected inheritance from a child could compromise the parent’s own well-thought estate plans.
As these co-eds leave home to
tailgate at football games study hard and their parents join the ranks of empty-nesters, give these planning documents more than a passing thought and get both peace of mind and control.
Confer with an estate planning attorney who is well-versed in these documents to determine which documents are necessary for your circumstances.