As parents, we always strive to protect our children and ensure their well-being. When our children turn 18, they are legally considered adults, capable of making their own decisions. However, this newfound independence comes with responsibilities that many 18-year-olds may not be fully prepared to handle. One way to ensure your young adult is protected and supported is by helping them establish an estate plan. Here’s why your adult teenager needs an estate plan.
Legal Adulthood and Decision-Making
Turning 18 and Legal Responsibilities
When your child turns 18, they transition into legal adulthood. This means that you, as a parent, no longer have the automatic legal authority to make decisions on their behalf. While this independence is an exciting step, it also means they need to have legal documents in place to designate who can make decisions if they are unable to do so.
ForExample: If your child is in a serious car accident and unable to communicate, without a Power of Attorney for Healthcare, you may not be able to make critical medical decisions for them or access their medical records. This delay can impact their treatment and recovery.
Medical Decisions
One of the most critical aspects of this is medical decisions. A Power of Attorney for Healthcare allows your child to appoint someone they trust to make medical decisions for them if they are incapacitated. Additionally, a HIPAA authorization ensures that you can access their medical records and communicate with healthcare providers.
For Example: If your child needs emergency surgery, and they haven’t designated a healthcare proxy, the hospital might not legally be able to share information with you or follow your instructions, delaying essential medical care.
Financial Decisions
Similarly, a Durable Power of Attorney for finances enables your child to designate someone to manage their financial affairs if they cannot. This includes handling bank accounts, paying bills, and managing any financial obligations they may have.
For Example: If your child is studying abroad and loses access to their bank accounts, without a Durable Power of Attorney, you cannot legally manage their finances to ensure their bills are paid and they have funds available.
Protecting Assets and Personal Wishes
Personal Belongings and Financial Accounts
Even at a young age, your child likely has personal belongings and financial accounts that are important to them. Having a will in place allows them to specify who inherits these items, preventing potential disputes among family members and ensuring their wishes are respected.
For Example: Heaven forbid, your child passes away, and they do not have a will in place, their assets may go through a lengthy probate process, causing delays and possibly resulting in assets being distributed contrary to their wishes.
Digital Assets
In today’s digital age, managing digital assets is crucial. This includes social media accounts, emails, and online banking. Your child can provide instructions for how these accounts should be handled, ensuring their digital legacy is managed according to their wishes.
For Example: If your child doesn’t provide access to their digital accounts, these accounts may remain active and unmanaged, leading to potential identity theft or loss of valuable information.
Pets and Titled Assets
If your child owns pets, they can designate a trustworthy person to care for them in their will. This ensures that someone they trust will take care of their pets if anything happens to them. Additionally, if your child holds title to assets such as an automobile, they can designate an individual to receive those assets upon their passing.
For Example: If your child passes away, and they want their dog to go to their college roommate and their automobile to be given to their sibling, a will and a transfer on death designation form on file with the BMV can ensure that their wishes are carried out.
Emergencies and Unexpected Situations
Accidents and Medical Emergencies
Life is unpredictable, and accidents or medical emergencies can happen at any time. By having a Power of Attorney for Healthcare and a Durable Power of Attorney in place, your child ensures that someone trusted can make critical decisions on their behalf without court intervention, providing peace of mind in stressful situations.
For Example: If your child is incapacitated in an accident and hasn’t appointed a Power of Attorney, you may have to go through a lengthy court process to gain the authority to make decisions, delaying necessary actions.
Study Abroad or Travel
If your child plans to study abroad or travel, having these documents in place is even more important. It allows you to manage their finances and make decisions if issues arise while they are away from home.
For Example: If your child is traveling and becomes ill, without the proper documents, you might face significant challenges in managing their medical and financial needs from afar.
Contingency Planning
Preparing for the unexpected is always wise. Estate planning provides a safety net, ensuring that plans are in place for various scenarios, from sudden illness to unforeseen accidents. This proactive approach can save time, money, and emotional distress in the long run.
For Example: In the event of a sudden illness, without an estate plan, decisions regarding your child’s care and finances may be delayed or handled by someone not in alignment with their or your wishes.
Building a Foundation for the Future
Learning Financial Responsibility
Helping your child understand and manage their finances early on sets the foundation for future financial stability. An estate plan encourages them to take responsibility and develop good planning habits that will benefit them throughout their life.
For Example: Without early financial planning, your child may struggle with managing money, leading to debt and financial instability later in life.
Preparing for Major Life Changes
Life is full of significant milestones, such as marriage, buying a home, or starting a business. An estate plan can be adjusted as life circumstances change, ensuring that your child’s plans remain relevant and effective.
For Example: If your child marries without updating their estate plan, their spouse may not be legally protected or recognized in financial and healthcare decisions.
Proactive Planning
Encouraging your child to be proactive about estate planning avoids procrastination and potential legal complications. It sets a precedent for regularly reviewing and updating their plans as needed.
For Example: Without proactive planning, your child may face legal complications or missed opportunities for tax advantages, leading to unnecessary stress and financial burden.
As parents, our goal is to prepare our children for the future and protect them from potential pitfalls by setting positive examples of how to prepare for the future while enjoying life. Helping your 18-year-old establish an estate plan is a wise step in achieving this. It provides legal protection, ensures their wishes are respected, and offers peace of mind for both you and your child. Encourage them to start early and seek professional advice to ensure their plans are comprehensive and effective. By doing so, you’re not only supporting their independence but also securing their future.
Contact me if you have any questions or to get your adult teenager’s estate plan started today.