On Their Own: Important Financial Info for Parents of College Bound Kids

This time of year brings back memories of anticipation for me and my family. It feels like only yesterday my twins were heading off to college, even though they are now independent adults. I remember the whirlwind of events, from college visits to applications, finally culminating with dropping them off at the dorm.

I also recall, the summer just before the start of college was full of preparations. The typical ones, like shopping for college supplies and bedding, are obvious. However, as a financial planner, I also encourage all parents of college-bound students to consider executing these simple but critical legal documents that may help you gain some peace of mind while protecting your child’s well-being.

Health Care Proxy:

Did you know that 18-year-olds are considered adults? That means, in the great majority of states. they are legally able to enter into contracts and permitted to make their own health care decisions. If your child got into an accident and was incapacitated, depending on the state’s privacy laws, the hospital may not be able to provide you with any information or permit you to make any health care decisions for your child. A health care proxy is a document authorizing someone to make medical decisions on the patient’s behalf. If your child still depends on you for other important decisions in their life, they may be happy to extend that trust to their health care as well.

HIPAA Release Form:

The Health Insurance Portability and Accountability Act (HIPAA) protects your child’s privacy from everyone – including parents. If your child is sick or injured, you may not be able to get information, unless your child has signed a HIPAA release form naming you as an authorized recipient of such information.

Durable Power of Attorney:

Even if you are paying the tuition bills for your child, the college’s bursar office is not required to speak with you on any of the child’s financial issues. A Durable Power of Attorney is a critical document that allows your child to appoint an agent, such as you, to manage his or her financial matters.

FERPA waiver:

The Family Educational Rights and Privacy Act (FERPA) prohibits an institution from discussing a student’s record with anyone unless the student has granted authorization. For instance, you would not be able to reach out to the college to obtain any information on your child’s grades even if you’re paying the tuition. Many colleges provide a waiver to provide additional individuals access to their records. On the flip side, parents may feel this can be intrusive and trust the children to share their grade reports with them. Discuss this matter with your child before college starts and decide in advance how you as a family wish to handle communication related to grades and other college-related issues.

During such a happy and tumultuous time, it may be uncomfortable to think that your child will need such protections. However, these exposures can be easily mitigated with minimal effort. Please reach out to your trusted advisor to learn more about critical documents for the college bound.