As parents, we always strive to protect and provide for our children. As your child reaches the age of 18, you may think that they are officially adults, ready to take on the world. While it’s true that they are becoming more independent, it’s also essential to recognize that certain responsibilities still rest upon your shoulders. One of those responsibilities is helping your 18-year-old establish basic estate planning. You might wonder why it’s necessary at this young age, but having these plans in place can ensure your child’s well-being and your ability to care for them if the unexpected were to happen.
Why is Estate Planning for 18-Year Olds Important?
At 18, your child becomes a legal adult in the eyes of the law. This means they gain the right to make their own decisions, including those related to medical treatment, finances, and personal matters. While it’s a milestone worth celebrating, it also means that as parents, you lose many of the automatic legal rights you once had over your child. Having basic estate planning in place can help you maintain some level of authority and involvement in their affairs.
Critical Aspects of an Estate Plan for Young Adults:
1. Basic Will
A will is a legal document that outlines an individual’s wishes regarding the distribution of their assets and the handling of their affairs upon their passing. Even though young adults may not have substantial financial assets, a basic will is essential because it allows them to specify the distribution of their tangible personal property, such as sentimental items, heirlooms, and personal belongings. Additionally, it covers the distribution of intangible property, like bank accounts, investments, and digital assets, ensuring that their wishes are respected, regardless of the value of the assets involved.
2. Durable Power of Attorney
Another crucial component of estate planning is establishing a durable power of attorney. This document allows you to manage your child’s financial affairs if they become incapacitated. Without it, accessing their bank accounts, paying bills, or managing their assets can be incredibly challenging, even for parents.
3. Healthcare Power of Attorney
One of the most critical aspects of estate planning is creating a durable power of attorney for healthcare. In the event that your 18-year-old becomes unable to make medical decisions for themselves due to an accident or illness, having this document ensures that you, as their parent, can step in and make medical choices on their behalf. Without it, you may face challenges and delays in accessing their medical records and participating in their healthcare decisions.
4. HIPAA Authorization
A HIPAA (Health Insurance Portability and Accountability Act) authorization is essential for your 18-year-old because it grants permission for healthcare providers to share their medical information with designated individuals, such as parents or guardians. This document helps protect their privacy while ensuring that trusted individuals can access their healthcare information when needed, particularly in emergencies or situations where medical decisions must be made on their behalf.
While your child’s 18th birthday marks a significant milestone towards independence, it’s also a time to acknowledge the continued need for your guidance and protection. Basic estate planning is not just for older adults; it’s equally crucial for your young adult to ensure their well-being and your ability to care for them in the event of unforeseen circumstances. Take the necessary steps to create a comprehensive estate plan to secure your child’s future.