Your Child’s Independence Day

8 Things to Do When Your Child Turns 18

So, your child has just turned 18. Congratulations! You have successfully raised your baby to the age of majority, but your job as a parent is never truly done. Now that the graduation parties are over and you’re sending your child out into the real world as an “adult” it is time to reevaluate your planning and take certain legal steps to protect your child. Below are 8 things to consider when your child turns 18 that can help transition your child into the legal responsibilities of adulthood.

1.    HIPAA Release

Until now you’ve been involved in your child’s medical decisions. Many parents continue to play a large role in their children’s medical care while they are at college. But once your child turns 18, by law, his or her medical insurance providers and doctors cannot release medical information to you under the Health Insurance Portability and Accountability Act referred to as HIPAA. By executing a HIPAA Release your child allows you access to the medical records.

2.    Advanced Directives for Health Care

Advance directives are legal documents that allow a person to control what medical decisions should be made if the person is unable to make medical decisions for him or herself.  These are especially important to have in place if some family members do not get along. A Health Care Power of Attorney is a document that names who your child would want to handle medical decisions if he or she should become incapacitated. A Living Will states what end of life decisions a person would want made, should the worst occur.

3.    Consider Life Insurance

You may already have a life insurance policy on your life, so that if you were to suddenly die, you could still provide for your children and their education. However, if you are cosigning on your child’s student loans, car loan, or credit cards, you may want to consider taking out a life insurance policy on your child’s life. That way, if your child unexpectedly passes away you will be able to pay off the loans and the funeral expenses.

4.    Financial Powers of Attorney

Until now, you have probably been helping or funding your child’s finances. Financial Powers of Attorney are documents that grant you the power to handle your child’s finances. These can be drafted very broadly, or limited to a specific act. This can allow you to continue overseeing the child’s financial issues such as his or her tuition, insurance policies, or bank accounts. This is helpful especially if your child goes away to college and finances are based in your home town.

5.    Update Your Own Documents

It is a good idea to review your own documents with an attorney every few years, or during a major life change such as your child leaving the nest.  Now that your children are out of the nest, your estate plan will probably change. You will want to meet with your attorney to review things such as your will, powers of attorney, trust, and living will to make sure these documents all align with your estate plan.

6.     Establish a Trust for a Spendthrift Child

Families with spendthrift children may want to establish a trust as part of their estate plan. A trust can allow someone financially responsible to hold onto money for the child who cannot manage money well on his or her own. Instead of making an outright gift to the child, the Grantor transfers the assets to a Trustee who manages the funds for the benefit of the child.  Many parents may want a trustee to handle money for their children well past the age of majority to be sure the funds are used for college, weddings and house down payments, rather than the fast cars and “fun money” that an 18 year old might favor.

7.     Establish a Trust for a Disabled Child

A trust is an efficient tool for providing for a person who is unable to manage his or her own funds due to disability. With a trust, the Grantor transfers the assets to a Trustee who manages the funds for the benefit of the disabled child.  The terms of the trust dictate how the money is to be used according to the wishes of the Grantor. If the beneficiary of the trust is, or may become, a Medicaid recipient, or a candidate for other needs based programs, the assets of the trust may be set up to avoid affecting the child’s eligibility. If set up correctly, the trust can manage money for the entire life of the disabled child if needed.

8.     Apply for Guardianship of a Disabled Child

If your child is severely disabled, you may need to apply for guardianship. A guardian is a person, appointed by the court, who handles the affairs and makes decisions for a person who is adjudged to be incompetent. Up until your child reached the age of majority, as a parent, you have already been fulfilling the role of guardian. The guardian acts as a fiduciary and makes decisions based on the best interest of the ward. In determining the need for a guardianship, the circumstances of the ward will be examined to determine if the benefits that the guardian can bring the individual outweigh the loss of freedom and autonomy that the ward will suffer.

The transition from childhood to adulthood can be tough, especially for the parents. Having the proper legal planning in place can make it a little easier. It is important to seek competent advice from an attorney for your legal planning. An attorney can help identify and explain what issues concern you, help you form a plan to accomplish your goals, and draft your documents for you.


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