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As a college student, the idea of estate planning might seem too premature. But it’s essential to understand that making an early start could secure your future more effectively. Taking small steps now can lead to significant benefits later on in your life. 

A question often arises, why should college students think about estate planning? Well, the fact is, life is unpredictable. Being prepared for any circumstance is the best way to safeguard your future. Having an estate plan provides you with the option to decide who will receive your assets, should something unexpected happen.

How Can College Students Begin Estate Planning?

Estate planning is no rocket science, even for college students. Here’s a simple approach to get started:

  • Inventory Your Assets: List all your assets, including bank accounts, investments, and digital assets.
  • Create a Will or Trust: Outline how you want your assets distributed.
  • Designate Beneficiaries: Assign beneficiaries for your assets and accounts.
  • Choose a Power of Attorney: Appoint someone to make decisions on your behalf if you’re unable to.
  • Review and Update Regularly: Periodically review your plan to ensure it reflects your current wishes and circumstances.

{FREE PRINTABLE} Comprehensive list of documents for heading off to college

FERPA Release

The Family Educational Rights and Privacy Act is designed to protect college students’ privacy. However, it can leave parents locked out in an emergency. A properly worded release allows school officials to talk with you and release your child’s records to you.

HIPAA Authorization

The Health Insurance Portability and Accountability Act was designed to protect a patient’s privacy. Consider having your child sign an authorization so that—just in case—any necessary doctors can talk to you about your child’s condition, care, and treatment.

Durable Financial Power of Attorney

This is a legal document that allows you to take care of your child’s checking or savings accounts, pay bills, etc., if your child is unable to. Regardless of the matter—whether due to illness or even just location (for example, if the school is on the other side of the country).

Advance Healthcare Directive/Power of Attorney for Healthcare

Like the financial version, this allows you to handle medical decisions for your child if your child is unable to do so.

A Will

At first glance, this may seem a little silly for the average broke college kid. In our digital age, there are some hidden complexities. For example, on average, an email account today is tied to 130 or more online accounts, each with their own username and password. Does your child have thoughts about who should manage their email accounts? Social media? Who would receive valuable gaming accounts, and close down other apps and accounts? It’s also a great time in your young adult child’s life to instill responsibility by encouraging them to think about planning in the long term.

Open a Joint Bank Account

This joint account will allow you to deposit money to make available to your child. It can assist with expenses and allow your child to have a debit card in case they need one.

Create Venmo or Paypal Account

Check with your child to see which online payment platform they use. This will give you another ability to get them funds quickly if needed.

Emergency Wallet Card

Print out an emergency wallet card and fill it out with your information and phone number to be contacted in case of emergency and any other medical information necessary for your child. Make sure your child carries it in their wallet.

Phone Number Exchange

When your child gets to college, have them give your name and phone number to their roommates/friends at school. And vice-versa, have your child check with their roommates/friends at school to see if they are okay sharing their name and phone number with you. This allows your child’s roommates/friends at school and you to communicate if their is ever an emergency with your child.

The Importance of Power of Attorney in College Students’ Estate Planning

A power of attorney document allows you to appoint a person you trust to make decisions on your behalf if you’re unable to do so. It’s your best assurance that your wishes are followed, even in difficult times. For example, if you are undergoing a medical procedure and are unable to communicate, your appointed agent can make critical healthcare decisions based on your preferences.

How to Balance Student Loans and Estate Planning

While student loans and estate planning may seem unrelated, they can intersect in an estate plan. You should be aware of the terms of your loans, particularly about what happens to them if something happens to you. For instance, federal student loans are usually discharged if the borrower passes away. However, private loans may still need to be repaid by the estate. Knowing these details can help you develop a more complete estate plan.

The Role of Insurance in College Students’ Estate Planning

As a student, if you have dependents or significant debts, life insurance might be worth considering. It can protect your loved ones from unforeseen financial burdens, covering student loans or other debts. Additionally, securing life insurance at a young age can often result in lower premiums, making it a wise long-term investment.

Why Should You Update Your Estate Plan?

Your life circumstances and assets will change over time, and your estate plan should reflect these changes. Regular updates are the key to ensuring that your plan remains optimal. Let’s say you buy your first car, a new property, or welcome a new family member, it’s crucial to update your estate plan to include these new assets or beneficiaries.

NEW COLLEGE SAFEGUARD SYSTEM

In California, once your child turns 18, you might lose access to their medical records and the ability to make crucial healthcare decisions without the proper legal documents. Ensure their protection with our College Safeguard System. This comprehensive package includes:

  • Advance Healthcare Directive: Authorize someone to make healthcare decisions on your child’s behalf.
  • HIPAA Authorization: Gain access to your child’s medical records and information.
  • Statutory Power of Attorney: Empower someone to manage your child’s financial and legal affairs if necessary.

Plus, as a bonus, receive our Parent’s Checklist for College Kids, a handy guide to ensure your child is fully prepared for college life.

 

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