Estate Planning for a Young Adult Child
Trying to settle on what to gift to a teenager when he or she reaches eighteen? A car? A deposit for an apartment? A trip overseas?
These are all nice gifts, depending on how much you can afford to spend. But there is one you may not have considered ... and it should not cost a bundle. Send your son or daughter to an attorney of his or her choice for some important documents. You may pay for your child's legal fees provided your child gives informed consent.
Every adult of legal age should at least have medical advance directives, a will (and possibly a trust) and a durable power of attorney. Why are these so important? The reason is that once your child reaches age eighteen, you will no longer be able to make medical and legal decisions for him or her without appropriate legal documents authorizing you to do so. Also, if your child has assets, he or she may not otherwise be able to distribute them advantageously at death.
If your adult child becomes ill or injured and cannot handle his/her own financial affairs, you will not be able to step in and conduct business (sign checks, file taxes, sell assets, etc.) unless there is a durable power of attorney or a trust naming you as successor trustee or attorney-in-fact. Otherwise, you will have to go through the courts . . . and that will take time, cost money and restrict you in many ways you cannot imagine.
Similarly, if your adult child cannot make his or her own medical decisions, it will be necessary for him or her to have a health care power of attorney that names an agent. And what if he or she should be so ill or injured that he or she is placed on life support before you get to the hospital? Unless he or she has made his or her wishes known through a legal document (in Ohio, a living will), you may not be able to have the life support removed without court approval.
Finally, if your adult child should pass away without a will, the probate court will distribute his or her assets according to the laws of the state where he or she lived, regardless of what the child wanted.
The child's attorney can also make sure that your new adult understands that all of these documents will need to be changed as the child's life changes, for example, as the child accumulates assets, and those the child cares about move, marry, have children, divorce, die, and so on.
Helping a child get started with this adult responsibility at the moment he or she becomes an adult is just one more responsibility parents can help teach. It fits right in there with how to balance a checkbook, how to handle a credit card and how to buy insurance.
Although we hope that it will be a long time before any of these documents are needed, planning for the worst is a necessary part of being an adult. And you will be sending the child out of the nest with a full layer of protection ... just in case.