Tuesday, January 27, 2015

Estate Planning for College

As we guide our clients through the planning process we watch for other opportunities where we can assist them and give them more peace of mind. One opportunity that frequently arises involves reassuring parents with college aged children that if something happens to their child while away at school they will still have the ability to assist their child.

     Often a strong motivation for people to have an estate plan is concern for what will happen to their children in the event of their death. These clients focus on providing structured distributions over the children’s lifetimes to ensure that there are sufficient assets to help their children along the way. They also pay special attention to whom they name as Guardians for their children, often naming three or more potential Guardians so they are assured that their children are raised in a loving home. But for as much time as these clients spend planning for their minor children, as those children grow older their parents forget one very important piece of the plan.
     Parents take for granted that they will be able to care for and assist their children throughout their lives. However, frequently parents forget that once a child reaches the age of eighteen, that child is an adult in the eyes of the law, entitled to make their own decisions, and protected by all the laws and rules that exist to keep information private and ensure proper care. Thankfully the parents already know, though frequently forget, about a tool that can allow them to continue to care for their now young adult child if that child is injured or falls ill. 
     As part of their own planning, parents executed Durable Powers of Attorney and Patient Advocate Designations, naming those individuals they wanted to make their decisions if they were unable to make decisions for themselves. By encouraging children to execute the same documents, after those children turn eighteen, parents will have the authority to make legal and medical decisions for their children. This way, no parent would race across the state or country after learning that their child needed assistance only to discover that doctors, bank, landlords, and more refuse to take instructions from the parent.
     In addition to providing a layer of added protection for children, beginning the estate planning process shortly after turning eighteen also has two other benefits. First, those children have now been introduced to the attorney who did their parent’s planning and have some idea of what is involved in estate planning. No longer are the Will and Trust mysterious documents known only from pop culture references. It also demystifies attorneys in general so that in the event that the now young adult encounters a situation where they need legal counsel they have a person they know they can call. 
     The second benefit arises because by starting to plan early in their adult lives these children begin to build a habit of planning. As they get older and begin to accumulate wealth of their own we work with them to put together their own Will and possibly a Trust. We can recommend that they begin working with a financial planner early in their life so they establish good habits and avoid falling prey to pitfalls that hamstring people without these resources.
     The process of putting together Powers of Attorney and Patient Advocate Designations is not onerous or time consuming. Most of the time we can handle the entire matter in a single meeting lasting only about an hour. At the end of that time, your child has been introduced to a number of valuable adult experiences and you have the peace of mind that you will be able to continue to look out for them while they grow into the strong, independent, successful adults you know they can be. 

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