Preparing for Life After High School: A Parent’s Guide to Power of Attorney, Asset Protection, and 529 Tuition Payments

When your child graduates high school, you will likely experience a mix of pride and nerves. It’s an exciting time!

It’s also a legal and financial shift into adulthood with significant changes you’ll want to be prepared for. This article offers practical tips about how you can protect your adult child, protect your own assets as a parent with an adult child, and deploy 529 assets without penalty.

1. Power of Attorney and Not Getting Locked Out of Your Child’s Life

Many people don’t realize that once a child turns eighteen, their parents no longer have automatic access to that child’s medical records or financial accounts, even in emergencies.

Three key steps:

• • • Healthcare Power of Attorney (POA)

• This document lets you make medical decisions if your child is unable to. It’s especially important if your child is away at college and something happens to them. Without it, hospitals may not even be able to tell you about their condition.

How to do it: Download a healthcare POA form for your state, have your child sign it in front of a notary, and keep a copy on file.

• • • Financial Power of Attorney

• This allows you to manage your child’s money, pay bills, or handle other financial matters if they’re unable to do so—like if they’re traveling abroad or in an accident.

How to do it: Use a standard financial POA form, have your child sign it, and keep it in a safe place. Make sure you have access to digital copies if needed. Pro Tip: Some financial institutions insist on using their own power-of-attorney forms. Banks are especially cautious about granting account access to third parties. Because using an institution’s specific form allows their staff to quickly verify and process requests, you may want to consider completing them in addition to your overall financial power-of-attorney document.

• Open the Conversation

• Talk to your child about why these documents matter. Reassure them that it’s about protection, not control, and that you’ll respect their privacy unless there’s an emergency.

2. Check Your Asset Protection and Liability Strategy

It’s easy to forget that your child’s new adult status—and their sometimes-risky behavior—can put your own assets at risk. A parent’s assets are most directly at risk when the parent’s name is included (as in joint ownership or car title), but there are also direct liability or insufficient insurance scenarios where assets can be endangered even without joint titling.

Three Key Steps:

• Review Car Insurance

• Make sure your child is listed as a driver on your policy if they’re using your car. If they have their own car, consider whether it’s better to have it in their name or yours. Remember, if the car is in your name, you could be liable for accidents or lawsuits.

How to do it: Call your insurance agent and discuss your options for coverage and liability limits.

• • Check Umbrella Liability Insurance

• An umbrella policy adds extra protection beyond your auto or homeowners’ insurance, which can be invaluable if your child is involved in a serious accident.

How to do it: Ask your insurance agent about adding an umbrella policy if you don’t already have one.

• Protect your Home and Savings

• Consider whether your assets are protected if your child gets into legal trouble. Some families set up trusts or other legal structures to shield their savings and home from lawsuits, but every parent should avoid joint account titling with their child on bank accounts, investment accounts, and home ownership.

How to do it: Consult with an estate planning attorney to review your asset protection strategy and account titling.

3. How to Pay College Expenses with a 529 Plan

If you own a 529 plan, it’s important to understand which payments qualify and how to time withdrawals correctly to avoid taxes and penalties.

Three Key Steps:

• Know What Qualifies

•  Your 529 plan can be used for tuition, fees, room and board (if your child is enrolled at least half-time), technology, and other items. For K-12, $10,000 per year is allowed.

How to do it: Visit your school’s website for their “cost of attendance,” a comprehensive estimate of tuition and fees, room and board, textbooks, supplies, transportation, and sometimes personal expenses. For a deeper dive, refer to “The Right Way to Spend from Your 529 Plan.” Keep those receipts!

• Plan Your Withdrawals

• Withdrawals can be sent as a check to the school, to you, or to your child. Electronic transfers are usually fastest, but plan ahead—it can take 3–5 business days for the money to arrive.

How to do it: Request your withdrawal as soon as you know the amount due and keep track of deadlines.

• Match Withdrawals to Expenses

• Make sure your 529 withdrawals happen in the same calendar year as the expenses. If you withdraw money in one year but pay the bill in another, you could face taxes and penalties.

How to do it: Always pay the bill before December 31 if you’ve taken a withdrawal that year.

Closing Thoughts

It’s normal to feel a bit overwhelmed by these new tasks. But by taking these steps you’re giving your child (and yourself!) the best possible start to this next chapter. Reach out to TGS if you have any questions or if we can help in any way. You’ve got this!

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by TGS Financial Advisors), or any non-investment related content, made reference to directly or indirectly in this article will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this article serves as the receipt of, or as a substitute for, personalized investment advice from TGS Financial Advisors. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. TGS Financial Advisors is neither a law firm nor a certified public accounting firm and no portion of this article’s content should be construed as legal or accounting advice. A copy of the TGS Financial Advisors’ current written disclosure statement discussing our advisory services and fees is available upon request.