One of the most important college essentials is not on any dorm packing list or official checklist. As parents of young adults turning 18, most of us might assume that our role as the ultimate protector and decision-maker (especially in emergency situations) will continue as our children attend college, study abroad or enter the workforce in whatever capacity.
But imagine if you can, the shocking moment when a parent has just been told that their 18-year-old child has been rushed to a hospital but that they cannot have immediate access to the child’s medical information or the ability to make important medical decisions. Yes, without the proper documents, a medical provider faces potential sanctions under the Health Insurance Portability and Accountability Act, commonly known as HIPAA, for disclosures that aren’t explicitly authorized by the patient. While medical providers are permitted to exercise professional judgment if the patient is incapacitated or in emergency situations, providers may be reluctant to exercise that discretion, particularly if they don’t have an existing relationship with the patient or his or her family.
Parents, guardians and their young-adult children should be prepared, in advance of any medical emergency, by getting the necessary legal authority in writing. I recommend that you sit down with your legal-aged young adult children and ask that they consider signing appropriate forms naming their parents or guardian as their “agent” to handle matters for them in the event of an emergency. These forms are obtainable online or can be prepared by an attorney for you.
Medical or Health Care Power of Attorney (“POA”)
By signing a Medical or Health Care POA (aka Health-Care Proxy), your young adult appoints an “agent” (i.e., parents or guardian) to make medical decisions on their behalf in case they are incapacitated and cannot make these decisions for themself. Each state has different laws governing a Medical POA and, therefore, different legal forms, but websites such as http://www.caringinfo.org and http://americanbar.org have downloadable forms. A good Medical POA form should include HIPAA disclosure authorization; if it does not, a separate HIPAA authorization should be signed. Whether the Medical POA requires the signature of one or 2 non-related witnesses or a notary varies by state based on the form. If your child’s college has its own form, you should have that form signed too.
A signed HIPAA Authorization permits health-care providers to disclose your child’s health information to the person the child assigns as their health care “agent” for a designated time period or indefinitely. A stand-alone HIPAA Authorization (not incorporated into a broader legal document) typically does not have to be notarized or witnessed and can be signed in advance by your child. Young adults who want parents to be involved in a medical emergency, but fear disclosure of sensitive information, need not worry. A HIPAA Authorization does not have to be all-encompassing since your child can stipulate not to disclose information about sex, drugs, mental health, or other details they might want to keep private.
Durable Power of Attorney (“POA”) – Optional (Case by Case)
A Durable POA is a legal document that authorizes a trusted person (i.e., parents or guardian) that your adult child designates to act as their “agent” or “attorney-in-fact” (even though the person need not be an attorney), and remains valid even if the child is incapacitated. Since this trusted person as “agent” can step into your adult child’s shoes to legally take care of business on their behalf, your child should only give this type of authorization to an adult they truly trust and who has their best interest at heart. An agent’s powers are generally very broad in that they can do such things as enter into legal contracts such as signing a lease, sign tax returns, access bank accounts, etc. This legal document should be taken very seriously…it may not be essential in many situations. Durable POA forms vary by state and should typically be prepared by an attorney.
FERPA stands for Family Educational Rights and Privacy Act of 1974 and was designed to protect the privacy of a student’s education records including getting access to your child’s college grades and transcripts. This Release form basically permits post-secondary institutions to disclose your student’s personally identifiable information and educational records to their parents without the student’s consent. Of course, another approach to getting access to a student’s grades and/or transcript is to require your child provide you log-on access to their college portal, especially if you are paying their college tuition. Having said this, your child can change their log-on credentials at any point so having them sign the FERPA Release may ensure more consistent access, as needed.
Once these forms are signed, it’s a good idea to scan and save them electronically so they are readily available on a smart phone or computer. You should also keep the original forms in a secure location for safe keeping.
So along with picking out their bedding for their dorm or making sure their passport is valid, discuss the importance of these legal forms with your adult children and get them signed before they go.
Shawn: Now you hear all kinds of deals about leasing cars, how can you negotiate a better deal if you want to lease?
Nina: Okay, well many people don't realize that they can actually negotiate the sticker price on a leased car in the same way that you would do that if you're buying a car. And since when you lease -- when you're, you know, your lease payments basically cover the depreciation, the difference between the sales price and the residual value. So it's definitely in your best interest to try to reduce that sales price as much as possible because then you'll pay you know, smaller dollars over the life of the lease. Make sure you pay attention to the down payment at the lease signing. And so here's an example, you might see an ad that says you know, lease payment is only 1.99 a month and that sounds like a great deal for thirty six months. The catch is, is that it might require a $3,600 down payment. So, if you amortize the down payment, then actually that 1.99 special, becomes 2.99. So, you really have to kind of look at total costs.
And then lastly, dealerships use the term, money or lease factor, when they're calculating your financing costs and a lease factor is not the same as an interest rate. So, you have to make sure the dealer converts that lease factor into a comparable interest rate so you know what your financing charges are.
Shawn: At the end of the day, does one method wind up being more expensive more often than the other, or can we tell that?
Nina: You know what, it really depends on how long, if you're going to hold the car for a long time, you're better off buying. But if you know, and if you're not, if you just really enjoy driving and you want to have a new car, then go ahead and lease. I mean, there's pros and cons to both, to be honest with you, it's not one size fits all.
Shawn: Alright Nina, great. Happy Thanksgiving to you. Alright, Nina Mitchell is with The Colony Group, for more go to wtop.com and search Her Wealth.
Consider this your training manual to get and stay financially fit for life!