Your parental rights have changed
Key Takeaways
- As young adults gain more legal rights, their parents lose them.
- Be prepared with the legal documents parents need to retain some of those rights.
- The onset of adulthood also is a good time to learn how to manage personal finances.
September is a time of transition for many families, with the back-to-school season often marking the moment when parents send their young adults off to college. While buying dorm supplies and textbooks is top of mind, there’s another crucial step to consider: ensuring you have the necessary documents in place for emergencies.
As your child turns 18, they reach the legal age of adulthood in most U.S. states. This milestone brings exciting new opportunities for them, like voting and living on their own. However, it also signifies a change in your parental role.
“As young adults gain more legal rights, their parents lose them,” says CPA Brian Bortz. “In the case unexpected situations arise, it is important to be prepared with the documents parents need to retain some of those rights.”
Grades and Academic Records
Even if you pay for your child’s college tuition, that does not grant access to their grades or transcripts. The Family Educational Rights and Privacy Act applies to all schools that receive funding from the U.S. Department of Education. For parents to receive the education records of a college student, the student must authorize the parents to receive the information.
Medical Power of Attorney, Health Care Proxy, HIPAA Release
You may be accustomed to discussing your child’s health with their doctor. However, when your child turns 18, you are no longer considered their legal representative. Under the federal Health Information Portability and Accountability Act or HIPAA, your 18-year-old’s health records are only between them and their health care provider.
If you need access to your child’s medical records, they may grant you medical power of attorney or health care proxy, which authorizes you to make health care decisions on their behalf, which can be especially important if for some reason they are unable to do so.
Living Will
Young adults also should have Living Wills. No one likes to think about it, but accidents do happen.
An Advance Care Directive outlines a person’s wishes about life-extending medical treatment and other intentions, such as organ donation. If you’ve experienced the stress and family tension that can come with caring for aging parents, the situation can be painfully similar should an accident occur with your young adult.
“A few well-laid plans can make all the difference when it comes to an emergency situation,” says Brian. “As much as you’ve hoped your child would be prepared to take care of themselves, there is comfort in knowing you can step in if needed.”
Durable Power of Attorney
Among other things, a Durable Power of Attorney (POA) form grants parents the authority to sign documents for their child, which is particularly helpful if students go abroad for a semester. You’re also entitled to handle tasks such as renewing the child’s car registration while they’re at college out-of-state, managing financial accounts held in their name or filing a tax return on their behalf. Durable POA forms vary by state. In some states, the medical POA can be included in the durable POA form.
Financial Documents
When your child was young, you or a grandparent may have set up a financial account designed to benefit them, such as those under the Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA). Now that the child is legally an adult, it’s important to retitle, or transfer ownership of the account, to the child’s name. This process not only respects their new status as an adult but also ensures they have full control over their finances.
If your child hasn’t already established a checking and/or savings account, the onset of adulthood is a good time to do that, too.
“In addition to opening their own accounts, I encourage all young adults to learn how to manage their finances. Topics such as goal setting, budgeting, investing and debt management can help them build a strong financial base that will support them through various life stages,” says Brian.
Navigating the transition when your child turns 18 can be both exciting and overwhelming. As you take these important steps to ensure their legal and financial well-being remember that a good financial advisor isn’t only there to help you into retirement, but also to help you launch your children into adulthood. Contact a member of our team to learn more.
Have Your Young Adult Attend Our Upcoming Financial Seminar
The 3to1 Foundation is an educational and philanthropic organization that serves the community by providing financial seminars and programs for people of all ages. The foundation’s 3to1 University and annual Accumulating Wealth Seminar helps attendees understand how to make their money work for them. To learn more visit www.3to1foundation.org/.
