Estate Planning for College Students: What to Do Before They Leave Home

College students may not own a house, have significant savings, or think they need an estate plan. However, once a student turns 18, parents no longer automatically have the authority to manage their finances or speak with medical providers on their behalf.

That can become a serious problem when a student is living far from home and suddenly needs help. Before your child leaves for college, it may be worth putting powers of attorney in place.

Why Do College Students Need Estate Planning?

Estate planning for college students is usually less about managing property and more about preparing for emergencies.

Before turning 18, a parent can generally help manage a child’s medical care and finances. Once the student becomes a legal adult, that authority changes. A parent may no longer be able to access financial information, handle certain transactions, speak with doctors, or make health care decisions automatically.

This can create difficulties when a student becomes injured, incapacitated, or simply needs help while attending school far from home.

What Powers of Attorney Should a College Student Have?

A college student should consider having two separate powers of attorney:

• A financial power of attorney

• A health care power of attorney

These documents allow the student to authorize someone, often a parent, to help manage financial or medical matters when necessary.

The purpose is not to give parents control over everything their adult child does. It is to make sure someone can legally step in and help if a problem arises, especially when the student is living in another state or far from home.

Does a College Student Need a Trust?

Most college students do not have enough assets to make a trust the main priority. For many students, powers of attorney are the more practical starting point.

However, a trust may make sense for certain college students who begin earning substantial income, including some college athletes. A student who suddenly receives a large amount of money may also have an LLC, accountants, financial planners, or other professionals involved.

In that situation, a trust can help provide a way for someone to manage and access those assets if the student becomes injured, incapacitated, or passes away.

What Happens Without a Power of Attorney?

Without the proper documents, parents cannot simply take over because the student is still their child. Once the student is an adult, managing financial or medical matters may require a conservatorship through the court.

That process can be lengthy, expensive, and difficult. A properly prepared power of attorney can provide a much simpler way for someone to step in when help is needed.

Set Up Powers of Attorney Before College Starts

Estate planning for college students does not need to be complicated. Even when a student has few assets, financial and health care powers of attorney can provide valuable peace of mind.

The best time to prepare these documents is during the summer, before the student leaves for school. Once your child turns 18, check whether the proper powers of attorney are in place so someone can help with medical or financial matters if an emergency occurs.