The “College Three” – a must for every college student’s back-to-school list

Authored by: Michael L. Rutkowski how to spend graduation money

If you are sending a child off to college this Fall, this Summer brings a delicate dance of transferring key responsibilities from yourself to your child. Those responsibilities may require your child to care for their own health and personal finances. A first aid kit and knowing their web banking passwords might be a good temporary solution, but as more complex issues arise, and your child is hours away, you may be left wishing that you did a bit more planning. This “planning” I am referring to is actually estate planning and, although this seems like a topic more commonly considered by the older crowd, there are a few documents that are essential for younger people too.

The three documents that we refer to as the “College Three” at the Rutkowski Law Firm are a Financial Power of Attorney (also known as a Durable Power of Attorney), Healthcare Power of Attorney, and HIPAA authorization.

Without these documents, in most states including Michigan, parents don’t have the authority to make health care decisions or manage money for their kids once they turn 18—even if those parents are paying their child’s tuition, still have the child on their health insurance plans, and claim the child as a dependent on their tax returns. That means if your child is 18 or older, in an accident, and becomes disabled, even temporarily, a parent might need court approval to act on his or her behalf.

Here are the basics:

Financial Power of Attorney – This document will give parents the ability to manage their college student’s financial affairs.

College students typically don’t have many financial assets, but they may have bank accounts, credit cards, and apartment leases in their name. Digital assets can also be added to a financial power of attorney and include assets such as online accounts students have with financial institutions and their school, social media accounts, and e-mail accounts. Without access to these accounts, parents might not know about bills, potential account overdrafts, and doctors their children are seeing. Depending how a power of attorney is set up, a student can even give a parent authorization to see grades, reports from teachers, and outstanding tuition balances.

Healthcare Power of Attorney – This document will give parents the ability to make medical decisions in the event that their college student can’t make those decisions for themselves.

In many states, including Michigan, a healthcare power of attorney is fairly broad, covering such factors as whether to discharge a patient, they type of treatment to administer, and even decisions about when to withdraw life-sustaining treatment. Language in such a document can also address details regarding organ and tissue donation and how to dispose of remains.

HIPAA Authorization – This document will give parents the ability to have access to medical records and information that is otherwise protected by the Health Insurance Portability and Accountability Act.

This document and authorization becomes truly important in that crisis scenario where your child is miles away from home, has been injured or is ill, and you can’t find out over the phone what has happened to them. The next couple hours as you rush to campus become the longest hours of your life. With this document, medical personal can discuss with you the particulars of what has happened, what is currently going on, and the care plan going forward.

If you have a kid going to college in the Fall, regardless of whether they are a freshman or senior, set up a free consultation with the Rutkowski Law Firm to discuss these documents in detail and talk about the process of getting them in place.

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