Parent of a new graduate? Time to update your estate plan – and theirs.
It is officially high school graduation season in PA. Proud parents everywhere are celebrating the momentous occasion when their child crosses the delicate line from adolescence to adulthood. Nearly 18 years of preparation and parenting have led to this point. Now your child is ready to move onto college or a career, and maybe even a home of their own.
If you are watching your young adult spread their wings, do not forget the very crucial step of updating your estate plan – and theirs - before they leave the nest. Nancy H. Meyers, Esq., Shareholder and Chair of the Estate Group at Salzmann Hughes P.C., has been practicing law for over 25 years. According to Meyers, anytime your family unit goes through a major life update, it is a good idea to check in with your estate planning team.
“Graduation means that your child has or is close to turning 18, making them legal adults responsible for their own finances and medical decisions. There are several important adjustments I would recommend my clients make upon a child reaching adulthood.”
What documents should young adults consider?
While it is not pleasant to consider as a parent, in the event your child becomes incapacitated after the age of 18, a financial Durable Power of Attorney is a document that can give parents access to a child’s financial accounts. Meyers explained, “Without this document in place prior to the incapacity, the only alternative may be to petition the Court to be appointed as legal guardian for your adult son or daughter. That process can be time consuming, expensive, and emotionally challenging.”
Even if he or she is not incapacitated, a power of attorney can provide convenience in managing your son’s or daughter’s finances if they are studying in another state or overseas. Additionally, a Medical Power of Attorney is a document that will give you access to medical records and will allow to make medical decisions on your child’s behalf if he or she is unable to make those decisions.
Therefore, it is prudent to have a conversation with your 18-year-old about the importance of planning for the future and being prepared.
What changes should you consider?
Now that your child is an adult, you may choose to bestow more responsibilities on your son or daughter in the event of your death or incapacity.
“As children age, many clients make adjustments to their estate plan beneficiary designations to reflect their children’s emotional and mental maturity,” said Meyers. “While the timing and ages may vary from family to family, 18 is a good age to reevaluate how and what you provide to your children. You may also consider allowing them to take on a fiduciary role for you." For example, your young adult could serve as an Agent under a Power of Attorney or as the Executor of your estate. While that may not be the right choice for everyone, your estate planning attorney can give you some guidance on what factors you should consider.
Watching your child blossom into their own life is one of the crowning joys of parenting. Yet at times, all parents feel stress creeping in as their children exercise their new independence. Update your estate plan to reduce your stress and maintain control over how you support your child now, and in the future.