With your child heading off to college, it’s understandable to want them to set them on the right path. This may include ensuring they know how to do laundry and can feed themselves.
However, it’s crucial to also teach them about financial power of attorney (POA). Not every adult child knows to look into this independently, so it’s beneficial to sit them down to discuss this essential document so that they don’t feel overwhelmed when maneuvering vital financial decisions.
Understanding Financial Power of Attorney
Power of attorney involves a legal document whereby an individual permits someone else to make important decisions on their behalf. This can encompass various subsections, such as POA over medical decisions. In the event an individual is in a state following a medical emergency where they can’t tell the doctor what they want done, someone they trust can do it for them.
An 18-year-old may not be thinking about those kinds of healthcare decisions because, ideally, they’re in good health themselves. An adult child can certainly still grant a parent or legal guardian that form of POA, but those heading out to college may be more interested in a resilient power of attorney over financial matters.
Through a financial power of attorney document, a parent or trusted loved one would be able to manage the college student’s bank accounts. The individual would also have the ability to deal with paperwork related to financial aid and even pay tuition.
Ultimately, it’s a matter of providing peace of mind for every college student need so that they can focus on their studies while the parents can assist with complicated financial matters that may prove daunting for the young adult.
Why Is It Important for Minors and College Students?
Financial power of attorney may, at first, sound unnecessary for someone heading off to university. After all, part of moving out involves students making their own decisions. But between applying for a student loan and paying off tuition bills, on top of attending classes and dealing with any outside jobs, it can quickly prove taxing.
Financial POA does more than just let parents pay a child’s tuition. As a fresh-faced adult, a student may come into contact with various legal documents, such as leasing papers to rent an apartment or documents to review before studying abroad. With power of attorney, the parent may be required to review any such documents to ensure there’s nothing that could negatively impact their child later on and sign off on them, too.
Additionally, living out of state or at the very least on your own can lead to numerous headaches when unexpected bills emerge. For example, a student in a car accident may have to maneuver through insurance and other complicated legal matters. Through POA, parents have an easier time gaining access to the materials they need to make informed decisions on their child’s behalf.
Benefits of a Financial Power of Attorney
The primary benefit concerning financial power of attorney for college students is the safety net it provides. Unexpected circumstances, such as an illness or accident, may prevent a student from handling financial matters independently. Without POA, a parent may not be able to get into their bank accounts to handle scholarships or pay tuition, which may jeopardize the child’s future.
Financial POA also ties into medical POA where a parent may require access to a child’s medical records and need to make financial decisions within a medical context. Additionally, the Health Insurance Portability and Accountability Act (HIPAA) limits what medical information doctors are able to tell parents in certain circumstances. This can limit how useful a parent can be in an already stressful situation.
With the proper legal documents, parents can work more closely with medical professionals to ensure the best care is given and can deal with medical bills the student may not be in the right state of mind to deal with.
Whether a student is unable to make financial decisions due to medical issues or something else, a financial power of attorney keeps all money matters moving smoothly. This is where a durable power of attorney may come in handy where the representative can deal with financial issues in the event the subject is incapacitated and literally cannot make such choices themselves.
No one wants to think about a child falling into a coma or something equally awful, but if that were to happen, the parent could continue paying their tuition or keeping scholarships active so that they can resume their life more immediately upon recovery.
How to Set Up a Financial Power of Attorney
Sending an adult child off to college is exciting yet busy time, but one thing no parent wants to overlook is a valid power of attorney. For parents who want to make sure their child is getting off on the best foot possible, call a power of attorney professional today.
An 18-year-old may not know to pursue this on their own, but there are numerous legal matters our law firm can help with, including estate planning and creating a living will. Having an attorney by your side will also be an asset if your child plans on studying in a state you don’t live in so that you can ensure all legal documents are valid no matter what.
You’re not just giving yourself peace of mind; you’re also setting your child on the best path to a fruitful future.