Palm Springs Law Blog

Thursday, November 24, 2022

Estate Planning for Your Child Going to College

Estate planning may not be the first thing that California families think about when packing their children off for college. But this time of change for your family is an ideal time to take another look at your existing estate plan, see if it’s still meeting your family's needs, and set up some legal protections for your new college freshman!

Why is estate planning so important when kids go off to university? There are several very good reasons, both financial and healthcare-related. Here is a closer look at a select few.

College Students Are Legal Adults

When your child turns 18, you may no longer have input into their medical and health care decisions or access to their financial records. They can make their own decisions about healthcare, medical procedures, and financial decisions, including applying for loans and credit cards.

As parents, though, we often want to participate in these decisions for our children or offer advice while still allowing our children to explore their new freedom and responsibility. But when bad things happen, and if your over-18 child gets hurt, you may not be notified or be able to find out which hospital they're in, their condition, or the medical care they’re receiving.

This is where a Power of Attorney document is useful. Your estate planning attorney can draft one wherein your child appoints you as their legal power of attorney, allowing you to be involved in any medical decisions they may be unable to make on their own, such as if they're unconscious or in surgery. Power of Attorney may also apply to financial decisions, allowing you to make sound financial decisions on their behalf if they become incapacitated.

Providing for a Special Needs Child

Putting the care of a special needs child in the hands of another can be an intimidating experience for many parents. If your special needs child is taking an important step in their educational journey or turning 18, it’s important to provide for them.

Consider a Special Needs Trust, which can provide funds for your child and help ensure that any specialty care is paid for. This type of trust may also preserve their qualification for Medicare and Supplemental Security Income, which is important if they cannot work full-time to earn an income and have health insurance on their own.

If Assets Have Changed Ownership

If necessary, review and update your estate plan anytime assets change hands, especially if you have a trust you wish to keep out of probate. For example, you may have given your college-bound child one of the family cars to take to college and transferred the title. In this case, it should no longer be listed among your assets. Or perhaps you provided a large sum of money to pay for tuition and fees.

These financial situations can impact your and your spouse’s estate plans. Perhaps you closed a college trust or investment account you had for your children, or you gifted a significant amount of money to them as a graduation gift.

Your estate plan should reflect your financial changes. Maybe you no longer contribute to a college account now that your child is grown, or you wish to divert the money you were putting toward college to your retirement. If you need to change your investment trusts or your retirement planning, an estate planning lawyer can help there, too.

Contact an Estate Planning Lawyer

If you don’t have an estate plan in place, there is more to it than just writing a will. A professional estate planning legal firm, like Heritage Legal, PC, of Palm Springs, CA, can help you with estate planning to protect your assets and legal interests. Contact us today to learn how valuable a solid estate plan can be!

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