Kids Heading Off to College? Don’t Forget About These Estate Planning Must-Dos
Many parents want to provide their children with the best possible help and care, even when they transition into college. However, as the children come of age, there is much more to consider than tuition fees and dorm essentials.
Before their children leave for college, parents must engage in estate planning measures to help provide legal protection for their children and potentially save their estate from future legal challenges. This article examines vital documents parents must include in their estate plans before their child’s first year of college.
Healthcare Proxy
A Healthcare Proxy, often called a Healthcare Power of Attorney, is a crucial estate planning document. Suppose the parents were to become incapable due to illness or accident. In that case, this legal document allows a designated person (typically the other parent or trusted adult) to make medical decisions on their behalf. Without a healthcare proxy in place, their college-age child may need to go through legal channels to be allowed to make vital healthcare decisions for incapacitated parents, resulting in delays during a potentially critical time.
Durable Power of Attorney/Financial Power of Attorney
Next is the Durable Power of Attorney (POA), also known as a Financial Power of Attorney. This legal document gives a designated person control over someone else’s financial and legal affairs if they cannot manage it themselves. These financial affairs typically involve paying bills, managing bank accounts, signing tax returns, etc. A financial POA can allow their college-age student to intervene and manage these matters seamlessly without any legal roadblocks, should the need arise.
Advance Directives
While it may seem morbid to consider, it’s important to discuss medical and end-of-life care even with college-age children. Advance directives contain instructions about the kind of medical treatments one would like if they cannot express their wishes. This legal document helps to avoid unnecessary suffering, mitigate confusion and disputes about treatment choices, and respect an individual’s autonomy when receiving care.
Last Will
Having a will is not just about distributing your assets after your death; it includes a range of aspects that can significantly influence the lives of your college-age children. Here are some reasons why parents should consider a last will.
- Financial Preservation
The first crucial reason to have a will is for financial preservation. Parents are often the primary providers for their college-age children. If something were to happen to the parents without a will, the distribution of their assets could become complicated and prolonged, leaving the children in a difficult financial situation. While this situation is typically considered for minors, it can also be relevant for young adults who are not yet fully self-sufficient and unable to pay for college or living expenses. - Uphold Parental Wishes and Values
Secondly, having a will can help uphold the parents’ specific wishes and values. Clear instructions can help eliminate any potential disagreements or misunderstandings about intent. A will can establish an educational trust, enforce responsible financial behavior, and even give direction about personal belongings and mementos. - Teach the Importance of Planning
Last, creating a will can teach your college-age children an important life lesson about the importance of future planning. By involving them in this process, they can get firsthand experience about how to manage their affairs when they become independent.
In conclusion, ensuring legal safeguards should be on every parent’s checklist and part of their estate plan before their children leave for college. Consulting with financial and legal professionals specializing in estate planning can provide comprehensive guidance on appropriately including your college-age children. Remember, proper planning today ensures financial independence for tomorrow.
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Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by Fresh Finance.
LPL Tracking #588887
Sources:
https://www.findlaw.com/forms/resources/estate-planning/reasons-estate-planning-is-important.html
https://www.investopedia.com/articles/pf/07/estate_plan_checklist.asp