Does your college student need estate planning in California?
2 August 2023 | Applicable law: US | 3 minute read
Many people first consider making a will when they experience a major life event such as starting a family, losing a loved one, or coming into a large sum of money. Turning 18 years old is a clear milestone – it’s the age a person can start voting or sign a contract. Yet, most people don’t see this life event as triggering the need for estate planning. This is a mistake.
Adulthood brings about many rights and privileges for the person turning 18, but it also places limits on the legal parent-child relationship. The parent no longer has automatic access to the child’s medical records, grades, bank account (unless it’s a joint account), or tuition statements.
Does your college student need estate planning?
For people with college-age children and grandchildren, this time of year is exciting and all sorts of things are on the family checklist – buying supplies for college dorms, preparing for move-in, selecting classes, purchasing textbooks, exploring clubs and extracurricular activities. Estate planning is not typically on the checklist, but it should be.
Here are some situations when parents have wished some basic planning was in place to help their young adult navigate difficult situations:
- Their college student is in the hospital after an illness or injury and they need to coordinate care and next steps with doctors
- Their college student experiences a physical or mental health challenge and they need to be able to step in and arrange for them to move back home (including terminating leases and dealing with landlords)
- There are issues at school and the client doesn’t have permission to talk to administrators (even though they are paying the bills)
- A legal or financial matter arises at home that the client could easily handle for the college student, but without proper paperwork requires the child to travel home to deal with it or try to find notaries on campus
The good news is that there are basic forms available for young adults to ensure that on the legal side things go smoothly while they are at college.
Key estate planning forms for young adults
Estate planning documents are not just for parents or grandparents. Everyone over the age of 18 should have at least a health care directive, power of attorney for financial decisions, and will. While a young adult can expect their circumstances and mindset to change considerably over time, executing these documents (which can be revoked or modified anytime) can give much-needed peace of mind in the present and prevent unnecessary distress in the future.
Fortunately, the state of California has made these basic documents available online for free (as discussed further below), and many other states have similar form documents for their residents.
Advance Health Care Directive
Everyone over the age of 18 should have a power of attorney for health care. Whether it’s a car accident or sports-related injury, medical emergencies are real possibilities that can incapacitate and make otherwise-healthy young people unable to make decisions for themselves. Without a health care directive, family may have the added distress of being kept in the dark about a loved one’s condition or find themselves unable to make key treatment decisions because of legal barriers.
The California Advanced Health Care Directive is a form that comes directly from the Probate Code. This form allows the principal (i.e., the person executing the form) to designate an agent who can make medical decisions if the principal becomes incapacitated. There is also the opportunity to indicate treatment and end-of-life preferences, designate a primary physician, and indicate preferences for organ donation. (Note that prohibiting organ donation on the form does not override a donor registration with the DMV authorizing donation.)
Power of attorney for financial decisions
A power of attorney for financial decisions is also important. This document allows the agent (also known as an attorney-in-fact) to step into the shoes of the principal (the person signing the form) to manage financial accounts, sign contracts, file tax returns, and sign or terminate leases, among other things. The agent’s authority can be limited in duration and/or limited to certain types of transactions. Like the advance health care directive, a durable power of attorney for financial decisions is a form that comes directly from the Probate Code.
Anyone over 18 can make a will. A will allows the author to indicate clearly who should receive their property at death. It also allows them to name the person responsible (i.e., the executor) for managing post-death affairs. While at 18 death is likely far in the future, having a will makes dealing with post-death matters significantly easier for loved ones left behind.
While will requirements in California are simple (a person can technically handwrite a will on a sticky note, though this is not advised!), the Probate Code contains a complete form accessible to anyone to use and it is available here. Simply having a will does not avoid the need for probate, so a young adult with significant assets should consult with an attorney about additional planning for this purpose.
Other considerations for young adults
The statutory documents described above are simple and not appropriate for everyone. A young adult with considerable assets of their own or specific medical, financial or legal concerns will benefit from a personal consultation with an attorney who can provide strategies based upon their specific situation.
Contact your Withers attorney with questions about estate planning and what may be needed for young adults in your life.