If your child is 18 and about to go to college, there are a host of financial and legal matters that are often overlooked.
Power of Attorney:
He or she should sign a durable power of attorney to authorize a parent (or other responsible adult) to handle financial or legal matters if necessary. When students are cramming for finals or off on spring break they are seldom concerned with paying bills for tuition, credit cards, phone, cars, etc. While the importance of responsibility for these matters cannot be understated, the reality of the situation is that kids will be kids. Having a power of attorney for your child will allow you to step in and help your child if he or she is unable to pay a bill or deal with credit card companies when a dispute arises.
Often times students will be lured into signing contracts, say for a gym membership, and find themselves in an untenable situation when they try to get out of it. Having a power of attorney may not untangle a messy situation your child has gotten into, but it will allow you to step in and help them if necessary.
Another situation that often arises is jury duty. While away at college, students can be called for jury duty in their home town. Students can be relieved of the duty if they inform the court that they are unavailable, but often times it doesn't get done. If your child has a power of attorney, you can correspond with the court on your child's behalf, and have him/her relieved of his duties.
A simple standard form for your state is probably sufficient to handle any matter your child might need help handling, so don't worry about personalized drafts.
Health Care Proxy:
Have your child sign a health care proxy. If your child goes away to school and incurs health problems that render him or her unable to make his/her own decisions, having a health care proxy can alleviate some of the stress that the situation will cause.It is important that if your child goes to school outside of the state you reside in, the health care proxy should specifically authorize use of the document in any jurisdiction or at least the state where your child attends school.
Get your child a credit card now and teach them how to use, not abuse it. Too often, college students are bombarded with credit card offers that result in them racking up debts they can ill afford, and leave them begging their parents to help bail them out. Teach your child how to keep and reconcile a check book. Best Bet: buy your child a computer software program like Quicken and encourage them to use it now. This will set a great foundation for future financial skills. Don't let your child forget to file an income tax return for their summer job. Best Bet: Match your child's summer wages so they can painlessly contribute their earnings to a Roth IRA and begin a lifelong pattern of savings. The amounts may be small, but the lessons invaluable.
Copy your child's wallet before they go, and keep it in a secure place. If your child loses his or her wallet you'll have the information to help.
Teach your child to recognize credit card and other scams, to be weary of identity theft and simple ways to avoid it, for instance, he or she should be very careful about giving out a social security number and shredding documents with personal information on it. If your child takes courses that require the submission of assignments by social security number rather than by name, he or she should be careful about discarding drafts of assignments with a social security number on it.
Even though your child may take a personal computer to school with them, public computer kiosks are available at many colleges and universities. If you child uses public computers, he or she should be careful about entering personal information on websites while using these computers.
Lastly, you and your child should regularly check your child's credit report to ensure that there is no foul play.
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