In this back-to-school season, parents are about to find—whether their children are 18-year-olds who are still in high school or children going off to college—that when a young person turns 18 and reaches the age of majority, the parents’ ability to deal with the child's private data is severely curtailed.
In a variety of different areas, but most significantly the areas of health information and financial aid information, the right to that data rests almost entirely with the child upon turning 18. Regardless of whether the parent is paying the health insurance, is on the hook for medical bills, is paying tuition, or is guaranteeing loans for financial aid, co-signing on a loan or co-signing on a lease for college housing, the parents' rights to information relating to the situation may be exceptionally limited. Most authorities in these areas are quite strict about observing confidentiality and privacy of their newly adult clients.
However, there is a simple work-around to these rules (well, it’s simple if you are getting the right advice), which is to have a power of attorney in place. This may not be an appropriate occasion to have a general power of attorney, which would give the parents control over everything, such as access to checking accounts and the ability to make general legal and financial decisions. The narrowly tailored solution, and one which should be acceptable to all parties, is to do a narrow power of attorney—one that, for instance, addresses only health insurance information or financial aid information, or both.
With a suitably drafted power of attorney in place, both the student and his or her parents could interact with the financial aid companies to discuss sensitive financial data and be entitled to participate in the decision-making process. The same could be said for medical information, whether related to health insurance or the direct provision of medical services. If parents are on the hook for medical bills, they may want to know the underlying care delivered.
Take care, though: a power of attorney is relatively easy to draft, based on a standard template, but it shouldn’t be left to amateurs. A call to your friendly estate planner can help lay the foundation for smooth communication on these important matters while your young adult is making her/his way forward, whether at college or out in the wider world.
Contact me today with questions or comments.