Of Counsel Jamil Daoud was quoted in the WealthManagement.com article, “The Two Estate-Planning Documents Clients Need for College-Bound Kids,” about the COVID-pandemic influenced trend of having health care directives and durable powers of attorneys prepared for college aged-children. According to Daoud, the need for these documents isn’t novel but the pandemic has brought the morbid reality of illness or a potential accident front and center for many clients and has underscored the importance of the documents.
“As far as health care decisions, state law applies and most states have default statutes for who can make medical decisions on your behalf, and it’s not always the correct order of people,” explains Daoud. For example, a stepparent or sibling may be the preferred agent to make decisions. With many college students traveling out of state, this can become an issue as both client and child may not be familiar with a particular state’s law.
A health care POA is most important, as it authorizes someone else to make medical decisions on behalf of the child, as well as gives access to medical records in the event the child is incapacitated or temporarily unable to make decisions for himself. The document is state specific to where it will be used.
Some clients are also opting for a durable POA to make financial decisions on the child’s behalf. The financial POA is also state specific. While the health care POA is important for all students, the financial POA can be more relevant for high-net-worth (HNW) families, as young adults from HNW families tend to have more assets and business interests at stake, says Daoud. But before discounting its importance, note that the financial POA can also authorize the designated agent to deal with student loans and sort out tuition bills.
Because these documents are relatively inexpensive and quick to put in place, Daoud says it’s a good idea for all clients with kids heading off to college to have them. Sometimes the attorney may need to step in and explain the importance of signing the documents to the child.