As your child turns 18 and steps into adulthood, they gain independence and new responsibilities. However, with that independence comes the reality that parents may no longer have automatic access to make crucial decisions on their behalf. One critical step that can provide peace of mind and safeguard your college student’s financial well-being is creating a financial power of attorney for college students.
What is a Financial Power of Attorney?
A financial power of attorney (POA) is a legal document that grants a designated person—the agent—the authority to manage certain financial matters on behalf of another individual, known as the principal. For college students, this document ensures that someone they trust can assist them with financial and legal matters when they cannot do so themselves. From accessing bank accounts to filing taxes or managing student loan payments, a financial power of attorney for college students can be invaluable during emergencies or periods of absence.
When a student encounters a financial obstacle or needs immediate assistance with an account, this document empowers their chosen agent to act quickly and effectively. Without it, resolving such issues could require court intervention, which can be time-consuming and costly.
Why College Students Need a Financial Power of Attorney
When a child turns 18, they are legally recognized as an adult. This milestone limits a parent’s access to financial or medical records without proper authorization. Often balancing new responsibilities and navigating financial independence, college students can benefit significantly from having a financial POA.
A financial power of attorney for college students becomes especially important in scenarios such as:
- Medical Emergencies: If a student is hospitalized, their agent can handle medical bills or insurance matters.
- Filing Taxes: Many students rely on their parents for tax filings. A financial POA ensures parents can access necessary financial documents and sign forms if needed.
- Managing Bank Accounts or Credit Cards: Whether resolving a frozen bank account or handling unauthorized transactions, the agent can act quickly to protect the student’s financial interests.
Having a financial power of attorney offers college students and their families a sense of security, knowing a trusted individual is prepared to handle urgent financial matters.
How to Create a Financial Power of Attorney for a College Student
Creating a financial power of attorney requires careful planning and attention to legal details. Here are the steps typically involved:
Let us help you!
- Consult an Estate Planning Attorney: An experienced attorney can help draft the document, ensuring it aligns with state laws and accurately reflects the student’s preferences.
- Choose an Agent: The student must select someone they trust implicitly to act in their best interest. While parents are often chosen, the agent could also be another close relative or mentor.
- Define the Scope: The document should clearly outline the agent’s authority, whether it involves specific financial tasks or broader decision-making powers.
- Sign and Notarize: To make the POA legally binding, both the student and the agent must sign it. In many cases, notarization is required.
- Provide Copies: Ensure that the agent, the student, and any relevant financial institutions have copies of the document for reference.
A durable financial power of attorney remains valid even if the student becomes incapacitated, making it a vital component of their overall planning.
Additional Considerations for Medical and Financial Power of Attorney
While a financial power of attorney focuses on managing monetary matters, parents and students should also consider creating a healthcare power of attorney. This document designates an agent to make medical decisions on behalf of the student if they cannot do so.
Combining a financial and medical power of attorney ensures that your college student’s financial and healthcare needs are covered comprehensively. Together, these documents enable parents or trusted agents to:
- Access medical records and communicate with healthcare providers.
- Handle both medical and financial emergencies seamlessly.
- Manage tuition payments or resolve student account issues efficiently.
Get Help Establishing Financial Power of Attorney for College Students in Your House
Establishing a financial power of attorney for college students is a proactive step toward ensuring their well-being and protecting their financial future. By addressing potential challenges before they arise, families can avoid unnecessary complications and focus on supporting their student’s journey into adulthood.
Navigating the process of creating a financial power of attorney can be complex, but May Herr & Grosh is here to help. Our experienced team understands the importance of safeguarding your college student’s financial and legal interests. Contact us today to learn more about how we can assist you in preparing essential legal documents and ensuring your student’s peace of mind.
