Sending a child off to college is an exciting milestone — for both students and parents. While you’re busy packing dorm essentials and setting up class schedules, don’t overlook some critical financial and legal preparations. Taking the time to handle these matters now can save you and your student from unnecessary headaches down the road.
Here’s a practical financial planning checklist to review before move-in day.
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Establish Powers of Attorney (POA) and Other Legal Permissions
Heading off to college is a big step but so is turning 18. Once your child reaches legal adulthood, you no longer have automatic access to their medical records, school grades, or financial accounts — even if you’re footing the bill.
Healthcare:
The nightmare scenario for any parent is having a child experience a medical emergency — and not being able to get information from the doctors.
While setting up legal documents like these may feel a bit extreme, accidents can and do happen. It’s always better to be prepared.
- A healthcare power of attorney (POA), also known as a healthcare proxy, gives you the ability to make medical decisions for your adult child if they’re ever unable to make them on their own.
If setting up a healthcare POA feels like too much or you’re short on time, consider a universal HIPAA release form. This document allows doctors to share medical information with you without transferring decision-making authority.
Finances:
Similarly, a financial POA allows you to make financial decisions and access your child’s financial records if needed. This can be especially helpful for managing bills, tuition payments, or resolving unexpected financial issues.
There are different types of POAs, and the rules vary by state, so it’s important to consult your attorney to determine the best fit. Some POAs only take effect if your child is incapacitated, while others become effective immediately upon signing.
Academics:
Even though you may be paying the tuition bill, once your child turns 18, you no longer have direct access to their educational records.
The Family Educational Rights and Privacy Act (FERPA) requires students over 18 to provide written consent before their school can release information like GPA, class schedules, disciplinary actions, or billing details.
A FERPA authorization allows you to access these records. Be sure to check with your child’s specific school, as some institutions may require additional forms.
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Discuss Money Matters (i.e. Budgeting)
College often represents a young adult’s first real taste of financial independence. Before sending your student off, it’s important to sit down and discuss budgeting and financial expectations.
Talk openly about what you plan to cover (tuition, books, housing, etc.) and what expenses will be their responsibility (entertainment, eating out, travel, etc.). It’s a good idea to have your child draft a basic budget listing their anticipated expenses.
If they don’t already have checking and savings accounts, help them set these up before they leave. Getting a system in place now can build confidence — and potentially avoid financial missteps later.
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Review Your Insurance Coverage
A major life change like heading to college is the perfect time to review insurance needs and make sure your child is properly protected.
Health Insurance:
Many students remain on their parents’ health insurance plans until age 26, but depending on where they attend school, their college’s health insurance program might be a better option — especially if their school is outside your insurance provider’s network.
Some student health plans may even be less expensive and offer better local coverage, so it’s worth comparing options carefully.
Auto Insurance:
If your child is not taking a car to school, check with your insurance company about qualifying for a “Student Away at School” discount. This reduced rate may be available if the school is more than 100 miles from home.
Renters Insurance:
If your child is living on campus, their possessions are typically covered under your homeowners’ insurance policy. However, if they are renting an apartment or house off-campus, renters insurance is a smart investment.
Renters insurance typically covers theft, fire, vandalism, and accidental damage to property — and often includes liability coverage in case of injury or property damage.
Closing Thoughts
Preparing for college isn’t just about buying supplies and decorating dorm rooms — it’s about setting your child up for success both academically and financially. Taking the time to handle legal documents, budgeting conversations, and insurance updates now can give everyone a little more peace of mind.
This document is being provided for informational and educational purposes and is not meant to be taken as specific advice. Oakworth Capital Bank does not provide tax or legal advice. All decisions regarding the tax and / or legal implications of these strategies should be discussed with your tax and / or legal advisors before being implemented.