What to Do When Adult Children Start Earning, Owning, or Managing Assets

There is a meaningful shift that happens when your child becomes an adult and starts earning income, buying property, investing, or managing assets. It is a milestone that often brings pride—and sometimes a sense of relief that they are becoming financially independent.

But it is also a milestone that should trigger a planning conversation.

Young adults need estate planning before they own or manage assets. And when they start building wealth, planning becomes even more important—because they are still young, still learning, and often more vulnerable than they realize.

Why Young Adults Needed Planning Before This Stage

The moment your child turned 18, you lost automatic legal authority to make decisions for them. Even if they were still living at home or in school, you could no longer:

• Access their medical information
  
• Make healthcare decisions in an emergency
  
• Manage their finances without permission
  

Without basic legal documents in place, families may need court involvement to step in during a crisis. That is why foundational planning is important even before a young adult has significant assets.

Why Planning Becomes Even More Important Once They Start Building Wealth

When adult children start earning, owning, or managing assets, their financial and legal exposure grows. They may be:

• Buying a home or rental property
  
• Opening investment or retirement accounts
  
• Starting a business or side venture
  
• Receiving gifts or inheritances
  
• Managing digital assets and online accounts
  

At the same time, young adults are still developing financial experience and may not fully understand risks like liability, creditor exposure, relationship changes, or tax consequences. Estate planning at this stage is not just about passing assets—it is about protection, structure, and guidance.

Core Planning Documents for Adult Children

Even young adults with growing assets do not need overly complex plans. A strong foundation typically includes:

A Will

A will directs who receives assets and who will manage the process. Without one, state law decides, which may not reflect your child’s wishes.

Durable Power of Attorney

This allows a trusted person—often a parent—to manage finances if your child is incapacitated, whether temporarily or long-term.

Advance Healthcare Directive and HIPAA Authorization

These documents allow parents or trusted individuals to make medical decisions and receive health information if your child cannot communicate.

A Simple Revocable Trust May Be Necessary

Once a young adult starts accumulating meaningful assets—such as real estate, a business interest, or significant investments—a simple revocable living trust can be helpful.

How Parents Can Guide the Conversation

Many young adults assume estate planning is something for later. Parents can help reframe the discussion in a practical, supportive way:

• “This is part of being financially responsible, like insurance.”
  
• “This makes things easier for everyone in an emergency.”
  
• “This protects what you are building.”
  

Framing planning as empowerment—not fear—often resonates with young adults.

Aligning Your Child’s Plan with Your Family’s Plan

When adult children begin managing assets, it is also a natural time to review your own estate plan. Coordinating planning across generations can clarify:

• Who steps in for whom during emergencies
  
• How inherited assets should be managed
  
• Whether trusts or protective structures should be used for your children’s future inheritance
  

This coordination creates continuity and reduces confusion later.

A Smart Milestone for Family Planning

When adult children start earning, owning, or managing assets, it is a milestone worth celebrating—and planning around. They needed a foundation before this stage, and they need thoughtful protection now that their financial lives are expanding.

If your adult child is starting to build wealth, this is an ideal time to put a foundational estate plan in place and coordinate it with your family’s broader planning. Our team is here to support you and your family through each step.