Intro: Welcome to the Paragon Podcast. A podcast focusing on the needs of high net-worth individuals and their families. We discuss the markets, tax strategies, and how to better manage wealth with the goal of living better for today while planning for tomorrow.
Elean
Hi everyone, I hope you’re all doing well. This is Elean Mendoza and I’m here with Evan Shorten, the firm’s founder and Principal.
Evan
Hello, this is Evan. I want to thank you for tuning into the podcast and I’d like to invite you to subscribe on YouTube, the Apple podcast app, or Stitcher Radio. Lastly, to stay up to date with our regular announcements, I recommend that you sign up to our email list which can be found on the homepage of our website at paragonfinancialpartners.com.
Elean
Now that it’s been a month since high school graduation, many of you are preparing for the next stage of your children’s or your grandchildren’s lives – college. Evan, I know that you’re in the middle of this as well.
Evan
Yes, my daughter starts at an out of state university in the coming weeks. It happens so fast. It feels like we were just looking at colleges a few weeks ago and now the first day of school is approaching pretty quickly. July is right around the corner, then August, and we’ll be flying to Indiana to drop her off. It’s an exciting moment for your kids, but it’s also hectic and stressful for you as a parent.
Elean
Well, congratulations!
Evan
Thanks Elean.
Elean
So with that said, in this episode we want to discuss a topic that doesn’t get talked about too often with regards to sending your kids to college and isn’t the most pleasant thing to think about in general. However it’s an important topic and it’s one that shouldn’t be taken lightly; that is estate documents and emergency planning.
Now I know for most families, their kids may not have much of an estate when they’re 18 years old. So to be clear this is more about having access to your children’s academic records in an emergency, being able to make financial and medical decisions on their behalf and so on. Once your child turns 18 and is a legal adult, you’re essentially locked out of their life from a legal perspective and they need to have documents prepared ahead of time in the event they’re not in a capacity to make decisions for themselves.
Evan
And while no one wants to think about these things when it comes to their kids, it is gut wrenching after all, it’s important to have your children’s estate documents in place and to have access to your children’s academic records.
Elean
So, Evan, what is probably the most important document you need to have prepared before sending kids off to college?
Evan
Most importantly, you should obtain a medical power of attorney, also known as a healthcare proxy. Heaven forbid, if any serious emergency should occur where your child is incapacitated or can’t make decisions for themselves a medical power of attorney allows the person listed in the document to make medical decisions on behalf of your child. I can’t stress how important this document is.
I also want to mention two other documents that should be done concurrently and should accompany the medical power of attorney. The first of those is the living will. A living will is not the same type of will that gives instructions to your heirs after your passing, a living will documents the care you want, or may not want, if you were to be unconscious but still alive. A living will allows someone to document their wishes with respects to tube feeding, pain medications, life support and so on. Creating a living will minimizes the amount of decision making that your medical power of attorney has to make.
The second document you should prepare along with the medical power of attorney is a HIPAA authorization form.
Elean
For clarification, HIPAA is an acronym for the Health Insurance Portability and Accountability Act. Essentially, HIPAA authorization allows for the release of a patient’s protected health information such as their medical records, drug prescription history, mental health etc.
Now along similar lines, the next document you want to prepare is probably the financial power of attorney.
Evan
Right. The financial power of attorney allows you to make financial decisions in the event your child were to be incapacitated or unable to make decisions for themselves. The financial power of attorney grants you the ability to manage your child’s bank accounts, pay bills, and most importantly handle their financial aid benefits during uncertain times.
Elean
Ok. Now this next document is one that rarely gets discussed, especially when it pertains to estate documents since it’s only relevant for students. That is FERPA, which stands for the Family Educational Rights and Privacy Act.
Evan
This may come as a surprised, but even if you’re the one paying tuition, once your child turns 18, you might not have the right to see your child’s academic and education records without prior written consent from your child. Getting FERPA authorization isn’t difficult, but keep in mind most schools have their own form which you should be able to obtain from the school administrative services or from the schools financial aid office.
Elean
It’s also important that you and your child prepare these documents before you drop them off at college. Most of these are going to require notarization and some colleges are going to want you to use their forms in addition to any legal documents you may have prepared in advance.
Evan
And we know this is an uncomfortable topic to discuss, especially when it’s regarding your children, but having these documents in place will help minimize the decision making process during an unfortunate event.
Elean
Ok, so hopefully you found this episode of the Paragon Podcast helpful. I highly encourage you to subscribe to the podcast and to our email list to stay up date with new episodes, announcements, and important dates. Thank you for tuning in and we’ll see you here next time.
