Dear Rick:
I know you’ve talked about this in the past, but the situation now applies to me so I hope you can help me. My 18-year-old daughter will soon be starting Michigan State as a freshman. I remember in the past you’ve talked about healthcare and property insurance and I have confirmed she is covered. I also have had the conversation with my daughter regarding living on a budget and the evils of charge cards. It’s a very exciting time for me and my family and I want to make sure that I haven’t forgotten anything. Therefore, is there anything else I should do with my daughter going to college?

Chuck

Dear Chuck:

Go Green! Go White! And, good luck to your daughter as she pursues her degree at Michigan State. Also, congratulations to you for having the financial conversation with your daughter. I recognize these conversations can be uncomfortable; but, I cannot stress enough how important it is for all parents to have that conversation with their college students. The financial mistakes that a college student makes can be with them for many years into the future. In addition, it could impact their future career opportunities.

I do believe there is one area that you need to take care of before your daughter goes to college and that is in regard to legal issues. Your daughter is now 18 which means she is a legal adult. As a legal adult, you no longer have the same parental rights that you used to. Therefore, to regain those rights you need to have your daughter sign a couple legal documents. The first one is a medical durable power of attorney.

If something unexpected should happen to your daughter and there is a medical emergency, you would not have any rights whatsoever regarding the treatment of your daughter. You may be forced to go to court to obtain those rights. I can assure you that you do not want to have to go to court in cases of an emergency. Therefore, from a medical standpoint, you should have your daughter execute a medical durable power of attorney along with a waiver of HIPAA rights. These two documents would allow you to take charge of your daughter’s medical issues if she is unable to do so. In the past, to obtain these documents you had to hire a lawyer, but that is no longer the case. There are plenty of places you can go to get a free medical durable power of attorney. In fact, you can download one from my website:

Another document that you may wish to consider is what is known as a general durable power of attorney. A medical power of attorney deals with medical issues, a general durable power of attorney deals with issues above and beyond medical. If for some reason your daughter could not handle her financial or legal affairs, you can step in without having to go to court. A general durable power of attorney covers more than just her finances; it can also cover things such as government benefits, and even dealing with the university and other legal issues that may develop.

Whether you’re legal adult child is going to college or not, all parents should consider and discuss with their child the importance of having a medical and general durable power of attorney. I’m a big believer that the more you can keep judges, courts and lawyers out of family affairs, the better it is. All too often we talk about a power of attorney and most people do them as someone gets up in age. However, they are just as important for younger adults. We all know that in this crazy world things happen and the old adage is true – an ounce of prevention is worth a ton of cure.

Congratulations to all those who are getting ready to go to college and remember, there is only one investment that has no risk, and that investment is a good education.

Good luck!

If you would like Rick to respond to your questions, please email Rick at rick@bloomassetmanagement.com.