With summer drawing to an end once again, it is time for children to return to school. Some will go back to the same school they have attended in the past while some will start a new school. For those children that are leaving for college – whether for the first time or as a returning student – there is yet another concern that parents must consider and address. Most colleges and universities are now advising parents to have their child execute Powers of Attorney before starting classes! Why would a child need such a formal legal document at such an early age? Isn't that what older people do as part of their estate plan?
We don't want to worry you, but the unfortunate reality is that every year, a significant number of people between 18 and 25 wind up in the nation's hospitals, and their parents are often locked out of critical decisions. The Federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) was enacted to provide guidelines to the healthcare industry for protecting a patient's information and privacy. Children under the age of 18 are generally considered minors so HIPAA does not generally pose a problem since the parents, as legal guardians, have access to their children's medical information and are the ones making most of the medical decisions, as well as paying for their medical expenses.
However, HIPAA can pose problems for parents of children that are 18 or older! When thinking about an 18-year-old son or daughter, a parent generally doesn't view the child as an adult since the child may still be living at home and having all of their expenses paid by the parents. But that is not how other individuals or institutions such as colleges, universities or employers view someone 18 or older. Under most state laws, an individual is generally no longer categorized as a minor upon attaining the age of 18, even though the person is still dependent upon his or her parents for significant aspects of their daily life (i.e., housing, financial, etc.). This means that, under HIPAA, the hospitals and doctor's offices must safeguard the patient's information from everyone, including the parents, who are often responsible for paying for their children! While it makes sense that a legal adult would be the one in charge of his or her own medical information, this notion can pose problems for young adults, not to mention their parents who fully expect access to their child's information.
Young adults should consider executing the necessary documentation to ensure their parents can access their medical records and discuss their medical care in the event of an emergency. This is most often accomplished through the use of a HIPAA Authorization Form. With this form, the young adult can designate any individual to be his or her Authorized Recipient of the medical information. Executing this document can be incredibly helpful if there is a question about the young adult's care while the parent is paying the corresponding medical bill. For example, Bill visits Dr. Smith while at college for a sprained ankle and presents an insurance card since he is covered under his parents' health insurance. Bill has not checked in with his parents for a few weeks so they are unaware of his injury. Bill's mother, Jane, receives an invoice from Dr. Smith's office for the visit and calls to determine the accuracy of the invoice and the circumstances that resulted in the charges. The doctor's office advises Bill's mother that, although Bill listed her as the responsible party for any charges, they are not allowed to discuss any aspects of Bill's visit with her due to HIPAA limitations!
A properly executed HIPAA Authorization Form can also be beneficial in the event the young adult ends up in the hospital. Because hospitals do not want to be fined for violating HIPAA, most will err on the side of caution and refrain from disclosing any information to family members without the properly executed documentation. Without this exchange of information, families can feel helpless and doctors may miss important family medical history and information.
In addition to the HIPAA Authorization Form, it is also important for the young adult to have a Health Care Power of Attorney executed. This document states who has the authority to make medical decisions on behalf of the young adult if he or she is incapacitated (i.e., the agent). This document also generally lists successor “agents” to serve if the initial “agent” is unable to fulfill that role. Without a Health Care Power of Attorney, the family may end up having to go to court to obtain a guardianship or conservatorship over the young adult in order to have someone appointed to make crucial medical decisions. In Illinois, the young adult will also need to state when the named individuals, or “agents”, will have the authority to make his or her health care decisions. This can range from “only when I cannot make the decision myself” to “starting today.” Lastly, the Illinois Statutory Short Form Power of Attorney for Health Care address life-sustaining procedures and whether or not the young adult would want such procedures applied to him or her. Given the gravity of the decisions to be made, a young adult will need to fully understand his or her rights and carefully consider each of those available options.
While the above documents address a young adult's healthcare, it does nothing to address the individual's financial circumstances. What will happen if the young adult is comatose, or otherwise determined to be incapacitated? Who has the right to access any funds in bank accounts to pay rent, mortgages, or other bills? Who is responsible for filing the young adult's tax return? Who has the authority to apply for any governmental benefits that the young adult may be eligible for? That is where the Illinois Statutory Short Form Power of Attorney for Property comes in. Again, a young adult is able to name an initial “agent” and successor “agents” to handle these financial matters.
Here are some additional things to take care of before you drop your child off at college:
• A FERPA Release: The Family Educational Rights and Privacy Act is designed to protect college students' privacy, but it can leave parents locked out in an emergency. A properly worded release allows school officials to talk with the parents and release a child's records to the parents.
• A Will: At first glance, this may seem a little silly for the average broke college kid. In this 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 its own user name and password. Does your child have thoughts about who should manage his or her social media and email accounts, receive valuable gaming accounts, and close down other apps and accounts? It's also a great time in a young adult child's life to begin thinking about planning in the long term.
O'Connor Law Offices has been helping families attain peace of mind for years! If you, or someone you know, has recently turned 18 years old and is leaving for college or starting their professional career, please give us a call at our Orland Park office to discuss the process and schedule an appointment. If your child has already left for college, don't panic! There is still time to ensure that your child gets the documents he or she needs. O'Connor Law Offices provides estate planning services to protect you and your family through all the major milestones in life.