Once 18, a child is considered a legal adult and is seen as being fully capable of making his or her own medical, financial and legal decisions. That being the case, taking estate planning measures when your first child turns 18 is highly recommended for all parents. If something happens to you and your child is of legal age, you want to make sure that they are left financially stable and with someone who is able to assist them in dealing with all their "adult" matters.
The Recommended Estate Planning
At age 18, your child should sign 2 important legal documents: a Durable Power of Attorney (for financial purposes) and the Advance Health Care Directive/HIPAA Release. In the event that your child becomes incapacitated, these documents will allow you to manage their finances and make decisions regarding healthcare. Without it, once your child is of age, health care providers will refuse to disclose information to you regarding your child's health in order to protect your child's privacy rights.
What to Expect When Your Child Becomes an Adult
Once your child turns 18, you will not be able to access his or her credit card or bank accounts without a Durable Power of Attorney. If you still wishes to have access to their finances, you will have to go to court to become a conservator of your child. Additionally, if you believe your child is not yet enough mature enough to handle his own finances, their inheritance can be held longer in a trust until they turn 25 or 30. We recommend that you set-up a permanent asset protection trust for your child, which we call the Personal Asset Trust. If there are multiple children in the home, parents can choose not to divide assets among children until they are all legal adults. We recommend setting-up a Children's Pot Trust if there is a child who has not yet attained 21 years of age. That way, the youngest has access to the whole trust estate as the older children did. Once the youngest attains 21, then it can be divided into equal shares.
Once your child becomes a legal adult, consult with an estate planning attorney who can help you take the steps necessary to ensure that your child is left in good hands if something happens to them or you.