Back To School Checklist for Estate Planning
Back to School is always an exciting time for students. No matter how old your student is, you will ask “Are they ready?” or “Will they be OK?” If your student heading back to school is 18 years and older, you need to consider this Back to School Checklist for Estate Planning. Your student is now an adult which means that you no longer have legal authority to assist with financial and health decisions without legal documents in place. I have three children and two of them have already reached age 18; graduated from high school; and found a new home on campus. My son is the oldest so his helpful advice to his younger sister was to make sure she had memorized her social security number. Every student should prepare themselves by taking steps to become fully independent and responsible before stepping out on their own. As parents, we want them to be able to do their own laundry; manage their own schedule; and make their own appointments. As parents, we also need to make sure that they have signed legal documents to protect themselves.
1. Put It In Writing All students over age 18 must sign legal documents before they head Back to School. In California, the legal documents required for a complete estate plan include a Trust; a Last Will & Testament – Pourover Will; a Healthcare Directive, and a Power of Attorney. These legal documents need to be in writing to avoid the cost and delay of court procedures upon the unexpected incapacity or death of a student. Students aged 18 years and older who don’t own real property or assets that exceed $100,000 do not need a California Trust. But students aged 18 years and older still need a Last Will and Testament; a Healthcare Directive, and a Power of Attorney to avoid the cost and delay of court procedures upon their unexpected incapacity or death. If students fail to sign legal documents before they head Back to School, their decisions and directions aren’t known, and they are causing their family undue stress, undue delay, and significant costs.
2. Will I advise students that California law will write a will for them and that their property will be distributed to their spouse and/or their children if they die without a signed Last Will and Testament. Most students heading Back to School are not married yet and do not have children yet. As a result, California law will write a will for them that distributes everything they own, their assets and their liabilities, to their surviving parents. The student’s surviving parents will then have the task of gathering the student’s assets, even if it is just a bank account and a bicycle or vehicle or removing items from a storage locker. When Students sign a Will, they get to decide who their beneficiaries are, it does not have to be their surviving parents. Student loans are forgiven upon the death of a student, but there are still other creditors that the Executor will have to pay which may include landlords and cell phone carriers as well as medical and funeral expenses.
3. Nominees Students aged 18 years and older realize that sometimes their parents are not the correct nominee or choice for who is in charge because they are too far away or too busy to assist in the administration of an estate. When I left home at age 18 to attend college at UC San Diego, my parents were not the correct choice for my legal documents because my twin sister would have been better equipped at taking care of things for me. Not only was she my best friend growing up and she knew exactly what decisions to make for my financial and health arrangements, she also was closer to me since she was attending college at UC Santa Barbara while my parents were home in the Bay Area.
I must advise students that when they choose an Executor, the person they nominate can decline and then we look to an alternate if the first choice is not able to act. This is why it is necessary to nominate a second and third alternate. The nominated Executor does not need to have formal training. If needed, the Executor can hire experts and professionals to assist them with the estate administration: an attorney, a financial advisor, a tax accountant, and a realtor are all professionals that are trained to assist in the process.
4. Health Students heading Back to School must sign an Advance Healthcare Directive. The directive is triggered if they can no longer make or communicate their healthcare decisions. Students have the right to give instructions about their healthcare and to name someone to make healthcare decisions for them. A student can name an agent to make healthcare decisions for them. In some circumstances, students may want to name co-agents, for example both of their parents. The directive is important because students are providing their agent instructions for health care, including end-of-life decisions. This portion of the document allows them to direct that their healthcare providers and others involved in their care provide, withhold, or withdraw treatment in accordance with the choice they have indicated. This legal document lets students express their wishes regarding donation of organs and the designation of their primary physician.
5. Finance Students heading Back to School must sign a Power of Attorney for financial matters. This document becomes effective when a physician determines that the student is unable to make their own financial decisions which sometimes is the result of a car accident, a stroke, or a coma. If students do not have a signed Power of Attorney, their family members will have to petition the court to be appointed as their conservator. A conservator is simply a court appointed power of attorney. It is a lengthy and costly process which can be avoided by having a signed Power of Attorney in place. This is needed to file the student’s tax return or to sign on the student’s behalf a settlement of a legal claim.
If you or your student need legal guidance with your estate planning documents, please call The Estate Planning Law Center at (209) 223-7625 to schedule a 30-minute consultation (in person, via zoom or via telephone). You can listen to attorney Christeson discuss the Back To School Checklist for Estate Planning on KVGC Radio, the hometown radio for Amador and Calaveras counties by going to telpc.com/radio.
