Congratulations! You’re now the parent of a legal adult. Your kid can now go out and buy your lottery tickets for you and vote in the next election.
It’s also a big step into the world of adulting, and with that comes more responsibilities – and a few things you need to add to your to-do list.
The Big 18 brings significant legal and financial changes that many parents don’t realize. Once your child reaches the age of majority, you no longer have automatic access to their medical, financial, or educational records. If you’re not on top of this, it can create unnecessary complications, especially in emergencies.
To avoid surprises, here’s a quick checklist of things to take care of now that your child is legally an adult.
Set Up Power of Attorney and Medical Documents
Once your child turns 18, doctors and financial institutions won’t automatically talk to you about their health or finances. If they get sick, injured, or need help managing their money, you could be left in the dark unless you have the right paperwork in place.
- Healthcare Power of Attorney – This lets you make medical decisions for your child if they can’t.
- HIPAA Release Form – Without this, doctors legally can’t share any of your child’s medical information with you—not even if they’re in the hospital.
- Durable Power of Attorney – This lets you handle financial stuff for them if they can’t, like paying bills or managing their accounts.
These documents are especially important if your child is heading off to college or traveling. A quick meeting with an estate planning attorney can get everything squared away.
Transfer Custodial Accounts
Did you set up a UGMA/UTMA account for your child when they were younger? Now that they’re 18 (or 21 in some states), that money officially becomes theirs.
This is a great time to sit down and talk about smart ways to use it – whether that’s for college expenses, investing, or saving for a big goal. If the money was meant for long-term savings, you might want to help them transition some of it into a Roth IRA or other investment account.
Get Their Credit Started on the Right Foot
At 18, your child can apply for credit cards, take out loans, and sign contracts – which means they can also rack up debt fast if they’re not careful.
This is a great time to talk about:
- Building credit responsibly (maybe by getting a starter credit card or being added as an authorized user on yours).
- Interest rates and why carrying a balance on a credit card is a bad idea.
- Checking their credit report for free at AnnualCreditReport.com so they can spot mistakes or fraud early.
Make Sure They Have the Right Insurance
Your child can stay on your health insurance plan until they’re 26, but if they’re moving out of state, it’s important to check that their coverage extends to where they’ll be living. If they’re taking a car with them to college, make sure their auto insurance policy still provides adequate coverage, especially if they’ll be in a different state or driving more frequently. Additionally, if they’re moving into an apartment or dorm, consider renter’s insurance to protect their belongings from theft, fire, or damage.
Sign a FERPA Waiver for College
If your child is in college, you might assume you can check their grades or handle tuition issues for them. Nope. Thanks to FERPA (a privacy law for student records), colleges won’t share any of that info unless your child signs a FERPA waiver. This is a simple form they can fill out at their school’s administrative office so you can stay in the loop.
Talk About Long-Term Saving and Investing
If your child is working (even part-time), now is a great time to open a Roth IRA. Even if they can only contribute a little, starting early makes a huge difference thanks to compound interest.
Encourage them to:
- Save a little from each paycheck.
- Set financial goals (travel, a car, an emergency fund, etc.).
- Learn the basics of investing so they don’t just let their money sit in a savings account earning next to nothing.
We know that you have a lot on your plate and that adding more tasks is not something you want to do right now. However, everything on this list can help you avoid spending even more time ironing out issues in the future. Doing things like talking to your kid about saving or making sure that you have all the paperwork you need should the unthinkable happen will help you avoid moments of panic down the road.
Have questions or need help finding resources to help? CLICK HERE to make an appointment.