Parents of college-bound students may be so distracted by tuition payments and dorm room shopping that they forget one important fact: Your 18-year-old “child” is a legal adult. While you may still be supporting them financially, certain aspects of their lives will no longer fall under your control. Here are a few back-to-school preparations to consider that will aid your college freshman far more than XL twin sheets and a mini-fridge.
Health care: When a child turns 18, you may carry them on your insurance plan, but they are considered a legal adult under HIPAA rules in terms of disclosing health information, says Lisa Brown, partner and wealth adviser at Atlanta-based Brightworth LLC. “You as a parent are no longer legally able to access health information of children going off to college who get sick or are in an accident and in the hospital,” she says. For this reason, Brown suggests having an estate planning attorney draw up a health care power of attorney. “The document allows them to name a parent or parents as their health care agent so you can speak to health professionals on their behalf if they are unable to and you can get information about their medical records,” she says.
Brown says it is a good idea to first have a conversation with your child about changes that happen in adulthood and how this is a measure that will protect them, not only as a college student, but as a young adult.
You can download forms from the Internet, she says, but it is not expensive to go to an attorney and have the papers drawn up. Attorneys who have worked with families for many years will often do it for free.
Make sure you keep one document at home and have your child keep a copy at school. Also have it scanned electronically in case you need to email a copy to a physician or to the emergency room.
Credit cards: Remember the days when credit card companies set up tables on the college green and pushed card offers at students with little or no income? Those days are over, thanks to federal laws that require anyone under 21 applying for a credit card to have an independent source of funds to pay the bills.
Thomas Nitzsche, financial educator for ClearPoint Credit Counseling Solutions in Atlanta, says in most cases college freshmen are using accounts co-signed by parents. He recommends parents sign up for mobile alerts to track expenses coming in from their kids. Have a conversation with your child about budgeting to head off any problems, he says. And know that if your child goes bananas, your credit will take a hit. One way to manage this is to pay the bills yourself and have your child pay you each month for his or her expenses.
Another option is to equip your child with a debit card instead of a credit card. She won’t be building credit history but will understand that when the money is gone, it’s gone. You could also add your child as an authorized user on your account. He will have his own card and begin building credit history, but you are managing the account. With many cards, you can set spending limits for authorized users to avoid out-of-control spending.
When you think your child is ready for an individual account, open a new account in his or her name or convert an existing co-signed account.
Cellphones: At age 18, your child may qualify for his or her own cellphone contract, but if you prefer to keep your child as an authorized user on your account, know that there may be some restrictions. Under AT&T policy, for example, authorized users cannot open or initiate a new line. If your child loses a phone or the phone is stolen, you should be able to authorize your child to get a replacement device at a retail location, says company spokesman Lance Skelly. Or you can purchase a new device yourself and ship it overnight to your child.
It may be cheaper to open a new line, but you would first have to remove your child from your account, he says. And you would then end up paying for two phones and two lines. Finally, if your child has a history with lost or stolen phones, it may be a good idea to get insurance so you can file a claim and replace the device.