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2022 College-Bound Checklist: Key Health Care and Financial Decisions

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Departing for college is a major life event for both students and their families. As we further transition into our “new normal” post-COVID, communication around health care and financial decisions is essential.

While 2021 brought unique challenges to the parents of college-bound freshmen, 2022 is a new, different frontier. With vaccines available, hospitalizations significantly down, and most institutions open for in-person learning, many are preparing for a more traditional year.

That said, concerns remain. According to an advisory issued by U.S. Surgeon General Dr. Vivek Murthy, the pandemic had an unprecedented impact on the mental health of America’s youth. “Mental health challenges in children, adolescents, and young adults are real and widespread. Even before the pandemic, an alarming number of young people struggled with feelings of helplessness, depression, and thoughts of suicide,” said Surgeon General Vivek Murthy. “The COVID-19 pandemic further altered their experiences at home, school, and in the community, and the effect on their mental health has been devastating.” The academic demands, social and lifestyle changes and high expectations that are often associated with the college years may exacerbate these emotional and mental health issues.

As we continue to navigate the post-COVID world, it is especially important to be informed and deliberate regarding new students’ mental and physical health care and financial management decisions: By the time they enter college, most students will be 18, resulting in an array of new legal rights for the young adult — but, critically, the loss of many decision-making rights of parents. Below, and in more detail in our College-Bound Planning Checklist, we explain why communication is key to planning.

Health Care Essentials

At age 18, one becomes their own sole health care advocate, representative and obligor. This means that parents do not have the health-care decision making power or access to medical information that they had when the students were minors. In practice, this primarily necessitates two essential steps.

First, it is critical to establish health care power of attorney for students. This legal document names the parent as “medical agent” for the student and, in the event that the student were to become medically incapacitated, gives the parent authorization to make medical decisions on their behalf. Many parents are surprised to learn that, even if the student is on the parents’ medical insurance, care providers will not take the parent’s direction without health care power of attorney. Crucially, in order for parents to access students’ medical records, the power of attorney must include a HIPAA (Health Insurance Portability and Accountability Act) waiver. Again, many are unaware that, barring this waiver, HIPAA may prevent the sharing of unauthorized medical information, including medical status  — even with parents.

Second, it is important to establish a living will, or advance directive, in order to establish directives for medical care in the event that the student were to become incapacitated. For instance, the directive can convey the student’s wishes for life-sustaining measures if they could no longer make such decisions themselves.

While it can be difficult to discuss issues surrounding powers of attorney and living wills, ultimately these discussions should facilitate peace of mind and alleviate anxiety, as families can have confidence that they have taken all available steps to prepare for a medical or mental health emergency.

Financial Management Essentials

Similarly, in most states parents lose the right to manage their student’s money when the student turns 18 — even if the parent is paying their college tuition.

It is important to establish a durable power of attorney for property for two primary reasons. First, doing so authorizes parents to manage the student’s finances, acting on their behalf, in the event that they were to become incapacitated and unable to make decisions themselves. Second, a durable power of attorney for property also gives parents the right to act on a student’s behalf when the student is, for instance, traveling abroad, and sign documents such as tax returns or leases on their behalf while the student is away at school. Note that the laws governing powers of attorney vary from state to state, and the powers of attorney should be executed in the state that the student is attending school in order to ensure all aspects are respected by the state.

Finally, the rights surrounding FERPA (Family Educational Rights and Privacy Act) also transfer from parent to student when the student turns 18. Parents who believe access to the student’s academic records — such as report cards, transcripts and disciplinary records — is appropriate will want to obtain correspondent FERPA release forms and have students authorize the release. Otherwise, access is only granted if the student is claimed as a dependent for tax purposes (which may be possible up until a student turns age 24). In this case, without an authorized release, the parent would have to formally request access to education records and provide documentation of dependent status.

For a more thorough discussion of these and other key topics for college-bound freshmen, including insurance needs, read the College-Bound Planning Checklist.

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2022 College-Bound Checklist

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Disclosures

This information is not intended to be and should not be treated as legal, investment, accounting or tax advice and is for informational purposes only. Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal, accounting or tax advice from their own counsel. All information discussed herein is current only as of the date appearing in this material and is subject to change at any time without notice.

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