As your child transitions into adulthood at age 18, it’s important to reassess your estate plan. The shift in legal and financial responsibilities that comes with adulthood can significantly alter how your estate plan functions. Here’s a closer look at what needs updating.
Legal rights and responsibilities
When your child turns 18, they gain full legal rights and responsibilities, including the ability to make their own medical and financial decisions. If your estate plan includes provisions such as powers of attorney or healthcare directives for your child, you may need to update them. Prior to this age, you could make medical or financial decisions for them, but now they are legally entitled to handle those matters themselves. It’s essential to revise your plan to reflect this newfound autonomy.
Financial considerations for an adult child
At 18, your child becomes eligible to inherit assets and take control of their finances. If your estate plan was set up with the assumption that your child was a minor, you may need to adjust it. You might want to ensure that your child can manage their inheritance responsibly, whether by granting them full access to assets or by setting specific guidelines for managing the funds. Trusts are often used for this purpose, helping to protect the inheritance until the child matures.
Healthcare decisions and privacy
Once your child reaches 18, they are no longer considered a dependent for purposes of health insurance in many cases. Additionally, medical privacy laws, such as HIPAA, grant them privacy regarding their health information. If you wish to maintain the ability to make healthcare decisions on their behalf in case of an emergency, you may need to revise your healthcare directives or establish a durable power of attorney for healthcare. This ensures that you remain involved in their medical care should the need arise.
Adjusting your estate plan to reflect your child’s adulthood ensures that your intentions are carried out effectively, while also addressing new legal and financial considerations.