Congratulations! You’re the parent of an 18-year-old. Your freshly minted adult is now capable of handling all his or her financial, legal, healthcare and education decisions – at least in the eyes of the law. While you may be used to shepherding your child’s finances, you won’t have access or input into decisions now that he’s 18 – unless you receive financial power of attorney.
Financial power of attorney is a revocable authorization that allows parents the authorization to act on their adult child’s behalf. Depending upon your needs, you can set limits on its powers or duration. It’s perfect to help you manage your adult child’s financial matters in many instances:
- Helping manage checking and savings accounts: Without financial power of attorney, you can’t access information on your child’s account activities or balances.
- Emergency management: If your child is suddenly incapacitated, such as in a car accident, financial power of attorney allows you to immediately and seamlessly assume management of all his or her financial obligations, including car payments, lease agreements and other bills.
- Travel abroad: If your child travels abroad and runs into financial difficulties while overseas –such as theft of debit cards, theft or other types of fraud – financial power of attorney allows you to work to resolve matters for your child’s stateside bank accounts.
- Responsibility issues: Hopefully, your child is able to manage his or her finances correctly. If not, financial power of attorney grants you the ability to correct overdraft fees and address other issues so credit isn’t damaged.
In Colorado, financial power of attorney is often referred to as general power of attorney. Many online resources offer downloadable forms you can use without seeking an attorney, or you may have your family’s attorney draw up papers for you.
Financial matters are just one of the areas in which your 18-year-old is now independent from you. Parents concerned about their child’s financial power of attorney may also seek to make plans to handle medical decisions and information with a medical power of attorney and HIPAA authorization, as well as educational records releases as required by the Family Educational Rights and Privacy Act. Contact your local banker today to answer any questions you may have!