Turning 18 is a significant milestone in a young person's life. It marks the transition from adolescence to adulthood, bringing newfound freedoms and responsibilities. While celebrations and excitement surround this age, it's also a crucial time to address important matters like estate planning. In this blog post, we'll explore why estate planning should be on the radar as your kids turn 18 and the key considerations to keep in mind.
1. Legal Autonomy and Decision-Making
As your child reaches the age of 18, they attain legal autonomy, which means they're now considered an adult in the eyes of the law. With this newfound status come decision-making rights, including medical and financial choices. It's important to discuss these responsibilities with your child and consider establishing documents like a healthcare proxy and power of attorney. These documents grant you or another trusted person the authority to make important decisions on their behalf in case they become incapacitated or unable to make decisions for themselves.
2. Creating a Will
While it may seem early to think about creating a will for someone so young, it's worth considering, especially if your child has accumulated assets, such as savings, investments, or a car. A will ensures their wishes are followed regarding the distribution of these assets in the event of their passing. Even if their estate is modest, having a will can prevent potential conflicts among family members and provide clarity during a difficult time.
3. Beneficiary Designations
Many young adults have bank accounts, retirement accounts, and life insurance policies. It's essential to review and update beneficiary designations on these accounts to reflect their current preferences. Failing to update beneficiary designations could result in unintended consequences, where assets may go to individuals other than the intended beneficiaries.
4. Digital Assets and Online Presence
Today's generation has a strong digital presence, from social media accounts to online banking. Have a conversation with your child about their digital assets and how they would like them to be handled in the event of their passing. Consider compiling a list of usernames, passwords, and accounts, and decide whether these digital assets should be managed, memorialized, or deleted.
5. Healthcare Directives and Medical Privacy
Encourage your child to draft a living will or advance healthcare directive, which outlines their wishes regarding medical treatments and life-sustaining measures. Additionally, discuss their preferences for sharing medical information with you or other family members. Without proper documentation, you may face challenges accessing their medical records or making healthcare decisions on their behalf.
6. College and Education Planning
If your child is pursuing higher education, estate planning can also play a role in ensuring their academic journey is supported. This could involve setting up a trust to manage educational funds or designating a responsible adult to oversee financial matters while they focus on their studies.
In conclusion, while turning 18 is a momentous occasion filled with excitement, it's also an opportune time to address estate planning needs. Discussing these matters with your child and seeking legal guidance can help ensure their wishes are respected and their financial and medical affairs are well-managed. By taking these steps, you're empowering your young adult with the tools to navigate adulthood responsibly and thoughtfully.