Clients with adult children in college, quite naturally, are often reluctant to think about what might happen to their kids in an emergency. But it’s important for them to have a plan in place in the unlikely event that they will need to make medical or financial decisions on behalf of their college-student children.
Clients need to take three steps to ensure they’re legally authorized to take action for their children in the event of an emergency: becoming designated as their child’s health care agent through a health care proxy or health care durable power of attorney; being granted access to their child’s financial information through a financial durable power of attorney; and being listed as ICE (In Case of Emergency) contacts on their children’s cellphones.
Once college students reach the age of majority (18 in most states), they are legally considered adults, and their parents are no longer entitled to see their medical or financial records or make decisions on their behalf. Parents may wrongly assume that, if they’re paying for all or part of their children’s tuition, they are allowed to access their children’s documents. But the legal truth is once students attain the age of legal majority, they have a legal right to privacy and the right to govern their own lives. That’s why it’s so important that clients and their children discuss ways they can act on behalf of their children should an emergency happen.
The health care proxy or health care durable power of attorney: This is a legal document by which a person authorizes a parent, other relative, or trusted family friend, to serve as his or her health care agent. It gives the agent the authority to make medical care decisions and access medical records for a person should he or she become incapacitated. An individual can only name one other person at a time to serve as health care agent. However, individuals can be successively named. Students should also sign what is known as a HIPAA (Health Insurance Portability and Accountability Act of 1996) release that gives medical practitioners permission to share information with those named on it.
It is good practice to list the health care agent’s phone numbers and contact information in an accessible place and to give a copy of the health care proxy to the student’s primary care physician and named health care agents. If possible, students should also carry a copy of the proxy in a wallet. It is also advisable to have a signed electronic copy available to be emailed to any emergency room.
Financial durable power of attorney: A financial durable power of attorney is a document by which someone gives access to his or her financial information to a specific person, who is called the “named attorney in fact.” (A “durable” power of attorney is one that is not revoked if the individual who granted it becomes disabled or incapacitated). In most cases the document goes into effect when it is signed. For most students, the purpose of the financial durable power of attorney is to give their parents access to financial college records and banking information, and to enable them to access or pay credit card bills and deal with a landlord.
Unlike a health care proxy, the financial durable power of attorney can be given to more than one person at a time. If the student is designating both parents, the document should state whether either of them can act independently or if both must act together. The student can also designate successors in the durable power of attorney and may revoke it at any time. All powers of attorney (durable and nondurable) are revoked at death.
It is possible in most states to establish what is known as a “springing durable power of attorney”—one that “springs” into existence in the event of disability or incapacity. However, these powers of attorney can be difficult to rely on because, in most cases, a physician’s certificate is needed to define “disability” or “incapacity.”
Programming cellphone or smartphone with ICE (In Case of Emergency) contacts. Adding ICE contacts to your cellphone allows first responders to get in touch with emergency contacts if you are incapacitated and can’t communicate. If a student is in a car accident or other emergency and can’t communicate, a first responder can call an ICE contact on his or her phone to let a loved one know what has happened.
Let clients know their children can add ICE contacts to their phones’ address books. They can list multiple contacts’ phone numbers as ICE-1, ICE-2, and so on. The student can program in as many numbers as he or she wishes.
It is important to understand that being an ICE contact does not give your clients the legal authority to act; it merely begins the communication process. Only a legal document such as a health care proxy or health care durable power of attorney can give a designated agent legal authority. Therefore it makes sense for a student’s health care agent and the ICE contact to either be the same person or be coordinated.
Though no one likes to think about their loved ones suffering an accident, it’s still important to have a plan in place in the event of one. Taking these security measures can bring clients peace of mind and can help their college student children take their first steps into estate planning. Talking about health care proxies, the financial durable power of attorney, and ICE programming is an excellent way for your clients to begin an ongoing discussion about responsibility and structure with their adult children.
Note: PFP Section members and PFS credential holders can access a podcast on updating estate planning documents by Susan Bruno, CPA/PFS.