Essential Estate Planning for Children Reaching the Age of Majority.

Turning 18 marks a significant milestone, not just in personal freedom, but in legal responsibility as well. As young adults gain the ability to vote, sign contracts, and make independent healthcare decisions, it's essential to ensure they have the proper legal documents in place to navigate these new responsibilities confidently. In our latest article, Avantia Executive Director Billy Howard outlines the key estate planning steps every family should consider when a child reaches the age of majority. From healthcare proxies to durable powers of attorney, these tools are vital for safeguarding your child's well-being and ensuring you're equipped to support them in unforeseen circumstances.

New Rights and Responsibilities

• Vote: You can vote in federal, state, and local elections.

• Serve on a jury: You can be called for jury duty.

• Run for office: Depending on where you live, you may be able to run for city, county, or state office.

• Enter into contracts: You can sign binding contracts.

• Make decisions: You can make decisions about your housing, transportation, education, finances, and healthcare.

• Live independently: You can move out of your parents’ home and rent an apartment.

• Get married: You can get married.

• Enlist in the military: You can join the military.

• Be sued or sue: You can be sued or sue someone else.

  
  

In addition, the adult child may also need to transfer assets from Uniform Transfer to Minor Act - UTMA accounts to their own account. The process for this can vary by account provider, state regulations, and how the UTMA was originally established. In Washington State, when the UTMA is established, the custodian, usually a parent, determines when the child takes control of the account and that can be 18, 21 or 25. This process can vary by account provider, but it usually involves the custodian initiating the transfer and restricting account management until it’s complete. Once the transfer is done, they can use the assets however they want. This also includes cash value life insurance policies (Indexed Universal Life, Variable Universal Life, Whole Life) where the child was the insured and parents the owner and beneficiary. Now the adult child owns the policy and has the responsibility to maintain the premiums (if needed) and change beneficiaries if needed. Your Avantia Lead Advisor can coordinate with the insurance carrier who will have the appropriate forms to update ownership and beneficiary of the policy.

Whether your child just reached the age of majority or did some time ago, there are essential estate documents that need to be created and reviewed (every 3 to 5 years).

Key Estate Documents

1. Healthcare Proxy (Medical Power of Attorney)

   • Purpose: Allows a designated person to make medical decisions on behalf of your child if they are unable to do so.

   • Importance: Without this document, parents may not have access to their child’s medical information or the ability to make critical healthcare decisions.

2. HIPAA Authorization

   • Purpose: Grants permission for healthcare providers to share medical information with designated individuals.

   • Importance: Ensures that parents can access their child’s medical records and communicate with healthcare providers.

3. Durable Power of Attorney

   • Purpose: Authorizes a trusted person to manage financial and legal matters on behalf of your child.

   • Importance: Provides a safety net for managing finances, signing documents, and handling other legal affairs if your child is incapacitated.

4. Living Will (Advance Directive)

   • Purpose: Specifies your child’s wishes regarding medical treatment and end-of-life care.

   • Importance: Ensures that their healthcare preferences are respected, even if they cannot communicate them.

     
     

Conclusion:

As your child steps into adulthood, having these essential estate documents in place is crucial for their well-being and your peace of mind. Encourage your child to sign these documents to ensure they are protected and prepared for any unforeseen circumstances. Please reach out to your Avantia Lead Advisor for further information on Estate Planning for your child or yourself.

Questions? Get in touch.