James Dean died at age 24 with a sizable estate and no Will. His entire fortune went to his father by operation of law, but Dean was raised by his aunt and uncle and probably wouldn’t have wanted his father to benefit. Amy Winehouse died at just age 27 and left a fortune but no Will. Her ex-husband, who was partly responsible for fueling her addiction problems, eventually tried to file a claim against her estate. What these examples tell us is that sometimes, people die tragically young.
Now, I know what you’re thinking: Estate Planning as a college student! Who wants to think about that? If you’re a student, you might think that you’re too young to die (which is probably true) and if you’re a parent, you probably think you’ll outlive your children (and you probably will), so why do this? In this article, FastWill explains the many valid reasons that your college student really does need an estate plan.
Why College Students Should Write Their Own Wills
A Will is a legal document that dictates where you want your property to go when you die. For a college student, who may be young and healthy, it’s a hedge against any unforeseen circumstances. You’ll most likely outlive your parents, but it’s never a bad thing to plan for an untimely death, just in case. Writing a DIY Will is also a good exercise in planning for your future. Listing your current assets and debts is a good way of keeping tabs on all you’ve already accomplished. It will also get you thinking about what you want to achieve. Do you want to own a home one day? Are you planning to get married? Have you already invested in cryptocurrencies? How do you feel about your social media presence? You don’t need to have an answer to these questions now, but the estate planning process will make you think a little deeper about the future.
Some college students already have children, and many have relationships with younger children (siblings and children that they mentor). If you have a Will, you can name a legal guardian for your children and leave your most treasured possessions to whomever you want.
Why Parents Should Estate Plan for College Students
The purpose of estate planning is generally to make sure your loved ones are taken care of. If you are the parent of a college student, you think of making a Will as a gift you are giving the younger generation. But the gifts you give your kids go way beyond just financial assets. You’ve already taught your kids to walk and talk, to read and write, how to ride a bike, and how to drive. It’s just as important to teach them financial and life planning, especially now that they’re old enough to live independently from you.
When you taught your kids how to balance their bank accounts, you weren’t thinking about losing them. And when you write a Will for your college student, it’s more about a life-teaching moment than it is the possibility that they may pass away. Estate planning is a teachable moment where you can show your kids the value of planning for the future. It’s also vital that college students start thinking about their assets because they live in a world exploding with new digital assets, like social media content, NFTs, cryptocurrencies, videos, music, and photographs. Odds are that your college student has had a social media presence for years already. The estate planning process can help them decide what they need to keep forever, like photographs of their graduation party and what they should delete (photographs from the frat party).
You already know the importance of updating your Will whenever you have a major change in your life, like birth, death, divorce, or inheritance. Having a child go to college should also prompt you to review your Will and help your child draft their own first Will. When your child goes to college, also review insurance policies that impact them, like life insurance, to make sure they still list the beneficiaries that make sense now that you are an empty-nester. You might also choose to take out a new life insurance policy in the name of your child. Updating your Will and estate planning documents may sound like an expensive and time-consuming process, but with FastWill it doesn’t need to be. You can easily make changes to your Will and draw up new legal documents any time you want. Since your kids are digital natives, they’ll already be expecting to make their estate plans electronically.
Parents May Lose Access to Their Adult Child’s Medical and Financial Information
Most parents are not aware of the fact that they lose control over their child’s medical records and financial information once they turn 18. Many parents who try to access their child’s bank account or request their student health center records are shocked when the requests are denied.
With respect to health care, you’ve always had the final say in medical procedures for your child. Up until now, you’ve had the right to see their complete medical record, and you were the one with the power to authorize others to access those records. But when they turn 18, the situation changes. According to guidance by the Department of Health and Human Services, “Once your son or daughter attains the age of majority based on your state’s law, they are considered adults and capable of exercising all of the health privacy rights under HIPAA, unless they lack decision making capacity. Even if you think your adult son or daughter lacks maturity, if they are legal adults, they get to make their own health privacy decisions. An adult son or daughter who has attained the age of majority has the right to control the privacy of their health information, including making decisions about who can receive health information about them which was created when they were minor children.”
This means that your adult children will have to give you permission to see their medical records. This is true even if they remain on your insurance and even if you are paying their college tuition. What if they’re incapacitated, and someone needs to act for them? This is where advanced directives will help. If your child’s estate plan includes an advanced directive, then you can step in to give medical providers guidance if there’s an emergency situation.
You also may have trouble accessing your child’s bank accounts and financial information if you don’t have a power of attorney. They can give you access to those accounts ahead of time by giving you their login information and passwords. A power of attorney will give you the right to simply step in and make financial decisions if your child is incapacitated.
Documents Parents of College Student Should Have in Place
So to sum it all up, parents of college students should make sure they have the following documents in place:
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A Will for themselves and a Will for their child.
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A Durable Power of Attorney giving the parent the right to make financial decisions.
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An Advanced Directive or Health Care Power of Attorney designating the parent as the person who will make treatment decisions if the child is incapacitated.
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A Family Educational Rights and Privacy Act (FERPA) Waiver is a document that allows an educational institution to release a student's education records.
FastWill can help you draft these documents.
