The sad truth that many of us have to accept is that our children are growing up not only in front of our eyes, but in the eyes of the state as well. Once eighteen, a child is considered a legal adult and is seen as being fully capable of making his or her own medical, financial and legal decisions. That being the case, taking estate planning measures when your first child turns eighteen is highly recommended for all parents. If something happens to you and your child is of legal age, you want to make sure that they are left financially stable and with someone who is able to assist them in dealing with all their “adult” matters.
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The Recommended Estate Planning Process
At eighteen years of age, your child should sign 2 important legal documents: a health care proxy and a durable power of attorney. In the event that your child becomes incapacitated, the health care power of attorney will allow you to be involved in making decisions regarding your child’s healthcare. In addition, your child should also sign a HIPAA release form. The HIPAA or, the Health Insurance Portability and Accountability Act, protects the privacy of the patient and their medical records, so it is important for your child to acknowledge you as an authorized recipient of their health information. Without it, once your child is of age, health care providers will refuse to disclose information to you regarding your child’s health in order to protect your child’s privacy rights. At that point, you would likely have to hire an attorney to reinstate your right to make medical decisions on behalf of your child. Furthermore, your child can also have a living will drawn up containing their end of life medical wishes that provides his family as well as physicians with directions to follow regarding issues such as life support and organ donation.
What to Expect When Your Child Becomes an Adult
Similar to the policy regarding your child’s medical information, once your child turns eighteen, you will not be able to access his or her credit card or bank accounts without a durable power of attorney. If you still wish to have access to their finances, you will have to go to court to become a conservator of your child. Additionally, if you believe your child is not yet mature enough to handle his own finances, their inheritance can be held longer in a trust until they turn 25. If there are multiple children in the home, parents can choose not to divide assets among children their children until they are all legal adults.
It is never too early to have a will in place. Legally, your child owns all inheritances granted to them as a minor and any funds they have earned themselves. In the catastrophic event that you outlive your child, their assets would likely go through probate and then be passed on to their heirs, which in most states would consist of their parents. Additionally, access to any child custodial accounts that parents have funded and that have been allocated for their child must be handed over once they are legally an adult.
When All Your Kids Become Adults
When your last child becomes a legal adult, the aforementioned steps apply. On your end, you want to make sure you have a will in place to ease the legal process on your children, particularly if you wish to leave them with an inheritance. In your will or living trust, unless you state otherwise, your of-age children will gain control of your property after your death. You can also name a property guardian so that in the event that you pass away and your child needs a guardian, one will be available to help manage whatever property the child inherits. You can also set up a trust for each child to ensure that they will all receive a predetermined amount from your estate to assist them financially.
Save Time By Completing Your Estate Plan Early
Estate planning can be done before you have kids, when they are minors and when they are legal adults. As long as you get it done, timing is secondary, though if you decide to get it done early, you should make sure that the documents reflect your wishes every year after the estate plan is drafted. It is important to note that the power of attorney can expire if you pass away or become incapacitated, while declaring a durable power of attorney would allow the designated individual to continue his duties.
While your child turning eighteen can be a very big shift in your life as well as theirs, estate planning doesn’t have to be. Once your child becomes a legal adult, consult with a licensed estate planning attorney who can help you take the steps necessary to ensure that your child is left in good hands if something happens to you.