Does Your 18-Year-Old Need a Will?

Answer: Yes. When a child becomes an adult in the eyes of the law, this change in legal status can raise major planning and other issues for parents and their children.

With the passage of high school graduation season, the celebration of the graduate's achievement and the excitement about the next chapter in their lives can sometimes overshadow an important legal reality: Becoming an adult raises significant issues pertaining to privacy, decision-making, and the ability of parents to continue parenting their now “adult” child.

Consider this: If your newly minted adult child were to become hospitalized and incapacitated without having medical and financial powers of attorney in place, as the parent you would have no clear way to be informed of your child's medical condition, to make medical decisions on their behalf, or to access insurance policies and bank accounts to pay their medical bills. This can be especially challenging if the child has moved away from home for college or work.

Unexpected times of crisis can be made less stressful for parents of young adults by pre-emptively putting in place legal documents created by an experienced estate planning attorney. To an 18-year-old, it might seem less thrilling to receive an estate plan instead of a car or a pre-paid debit card, but it's one the smartest and most powerful gifts a parent can give.

BARE MINIMUM

While most young adults won't have assets requiring a trust or a complicated package of documents, we believe anyone just starting out in the world does need, at a bare minimum, the following:

• last will and testament
• durable financial power of attorney
• healthcare power of attorney
• advanced healthcare directive (living will)
• HIPAA release (so medical professionals may communicate with the person named as health care power of attorney)
• organ donation form

A basic estate plan for a young adult is relatively inexpensive, particularly if their plan is an “add on” to the parents’ more complete estate plan.

For parents with assets or specific needs that require the creation of a living trust to carry out their wishes, they might consider drafting at the same time a plan for their young adult child that will carry the same level of protections and specific guidelines as the parents' trust, particularly if the parents’ plan names those young adult children as their only heirs. Oftentimes, particularly when we want to protect a young adult child’s inheritance, that planning must take place at the parents’ level, not the child’s. Without the child’s own plan, though, many of those protections can be lost.

YOUNG PEOPLE OWN THINGS, TOO

Creating a last will and testament sparks young people to consider what happens after they perhaps get married or have children of their own, as well as what they own and what it is worth.

There are more practical reasons for it, as well. Many young people often have at least some money and other assets, whether from a job that pays well or from an inheritance through a parent or grandparent. If the young person wants to direct where those inherited possessions should go if he or she were to die, then a Will is often the best strategy.

WHO WILL RAISE MY BABY'S BABY?

Unplanned pregnancy is another compelling reason for a young adult to draft a Will. No matter how much you have counseled abstinence to your teens or educated them on safe sex, they may still become young parents.

Who will be the baby's guardian if a young, perhaps unwed, parent dies? The young parent's Will can provide him or her with a mechanism to determine who he or she wants to raise their child if something should happen to them.

A FINANCIAL RITE OF PASSAGE

Wills for young adults can be created relatively inexpensively. It's also important to periodically update Wills created for young people to reflect new assets and additions to their families. Meaningful possessions to your teen could range from bank accounts and a car to a beloved pet or even a Lego collection. If something happens to the young person, what is going to happen to the animal, to the collection or the car?

If you find it difficult to broach the subject of estate planning with your children, you can camouflage it by including it in a larger conversation about financial issues and telling the child, "We're going to open a bank account in your name and arrange for you to meet with a financial advisor and write a Will." Of course, that conversation is much easier when discussed in the context of the parents’ own estate planning, and what they have (or should) put in place.

Young people are often eager to take any first steps that bring them closer to the rights and privileges of adulthood. Creating a Will doesn't have to conjure up thoughts of death; rather, it can put a young person in the mindset of someone who is going to have a successful financial life. A Will shows others that the young person has thoughtfully taken on adult responsibilities..

Adapted from the Daily Plan-It newsletter