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What Every College Student Should Know About Finances Part 4: Legal Concerns

Suddenly becoming an adult means that your privacy and legal concerns are yours alone!

Welcome back to part 4 of our series on What Every College Student Should Know About Finances and we are glad you enjoyed  Part 3: Spending Your College Money 

  • Written by Marjorie Daley, author of the New Adults’ Guide to Basic Finances.

Table of Contents

  1. Power of Attorney
  2. Wills
  3. Living Will or Advanced Directive
  4. Finding a Lawyer
  5. Conclusion

You may not realize this, but as soon as you turn 18, no one is entitled to your personal information unless you authorize it. This means access to your bank account, your taxes, your medical records, etc. I strongly recommend having someone who can step in for you in an emergency. 

1.  Power of Attorney

Allowing someone to make legal decisions for you – be very careful about signing one of these!

The first document you should have is a Power of Attorney. The two main types are full power of attorney and a limited power of attorney. If you give someone a full power of attorney, they can conduct business on your behalf. They can take out a loan, they can sell your car, they have FULL power over your finances and personal information. The law views their actions as taken with your full permission. ONLY give someone full power of attorney if you trust them implicitly. 

A limited power of attorney can be for medical care, certain financial transactions like selling a car, etc. Since medical staff cannot talk to your parents without your consent, having a limited power of attorney for health care means that your parents/spouse/significant other can speak for you and receive medical reports. Hospitals usually operate under “implied consent” which means the doctors act in the best interest of the patient in dealing with family. The difficulties arise when you have a non-traditional partner, same-sex or otherwise. Having a power of attorney for health care means that your partner is recognized.

Another use for a limited power of attorney could be for selling a titled vehicle. I have sold vehicles for several family members and the limited power of attorney for that specific vehicle allowed me to sign the title and issue a bill of sale. Two suggestions – limit the power of attorney using the vehicle’s VIN number and make sure that the name on the POA and the name on the car title are exactly the same. 

2.  Wills

If you have dependents or belongings, have a will.

A will is a legal document that distributes your belongings and gives a Personal Representative the authority to deal with your final expenses, file taxes for you, etc. If you have dependents or belongings, have a will. They are simple. You can even download one off the internet (NOLO is very good). Without a will, the state gets to decide who gets your stuff. 

3.  Living Will or Advanced Directive

Assigning someone to speak for you if you cannot make medical decisions for yourself.

This type of will covers what type of medical care you want if you are unable to speak for yourself. If you have strong feelings about heroic (do everything possible) versus palliative (let me die in peace) care or certain medical practices like blood transfusions or organ donation, have a living will. Otherwise, your loved ones or the doctors, or in a few cases, the courts, get to decide what care you should receive. 

4.  Finding a Lawyer

Lawyers are expensive. There are less expensive options. A law school in your state may have pro bono (free) or sliding scale legal services from law students under the supervision of a qualified attorney. A law firm may have a law student clerking with them who can do the same thing. You may even be able to find the documents online. Just be aware that each state has different laws, so it does help to have a live person to talk with. 

5.  Conclusion

Good luck on your college adventure! You will learn more than you may expect to and one of the most important concepts you can master are your finances. It may seem like yet another thing to add to your already busy schedule, but learning these skills will stand you in good stead for the future. Choose your college and major carefully, plan how you will pay for it, and spend money cautiously. Remember that your goal is not to mortgage your future.

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