A Recent Article in Forbes Outlines the Danger:
"If you are about to send a child off to college or to a gap-year program, you're probably busy with last-minute shopping, packing, and worrying about roommates. Here's one more thing you should do as you prepare for the big separation: Ask this young adult to sign a durable power of attorney and a health care proxy.
These two estate planning documents, more commonly associated with older folks, are essential for younger people too. Without them, in most states parents don't have the authority to make health care decisions or manage money for their children once they turn 18-even if they are paying the tuition, still have those children on their health insurance plans and claim them as dependents on their tax returns. That means if a young adult is in an accident and becomes disabled, even temporarily, a parent might need court approval to act on his or her behalf.
The risk is real. Accidents are the leading cause of death for young adults, and a quarter-million Americans between 18 and 25 are hospitalized with nonlethal injuries each year.
But it doesn't take something nearly that drastic for parents to need to act on a child's behalf. Bradley J. Franc, a lawyer with Houston Harbaugh in Pittsburgh, realized that two years ago, when his son Alex, then 19, was a sophomore at Penn State. After traveling to Mexico for spring break, Alex developed a severe intestinal bug that landed him in the college infirmary. Franc rushed to visit him there, only to find that doctors refused to discuss his son's condition, citing privacy concerns.
Fortunately, Alex Franc promptly recovered. But the temporary scare to his concerned parents could have been avoided if he had signed a health care proxy before he went off to college." (from Two Documents Every 18-Year-Old Should Sign" by Deborah L. Jacobs published in Forbes)