The Impact of Turning 18

By Bill Schwartz, CPA, CFP®, Managing Director & Principal

Like many parents, the Labor Day holiday (or the US Open, if you are a tennis fan) represents the end of summer and the beginning of the school year.  If your child or children are younger, it is mostly about school supplies and making sure last fall’s clothes still fit.  However, if they are of college age, there is more to consider.

You may not consider your 18-year old child an adult, but in the eyes of the law, it is a different story.  Your child can now vote, serve on a jury (why should we have all the fun?), sign a contract, and marry without parental consent.  In addition, they are now wholly responsible for their health and education records, including grades, schedules, and financial accounts.  College tuition bills will automatically go to the student, not the parents, regardless of who pays. We can thank the Family Educational Rights and Privacy Act (FERPA) of 1974 for that.

Most schools allow your child to sign a waiver to give you, the parents, access to academic information, so that issue can be easily solved.  But what about health and other financial stuff?  The following is a list (although probably not comprehensive) of the documents that you should consider having for your 18-year old:

  • HIPAA (Health Insurance Portability and Accountability Act of 1996) Release will allow you, the parents, to get information from a doctor or hospital in the event your child is hurt or unable to share with you directly. This document is necessary whether they are on your health insurance plan or not.
  • Health Care Proxy gives you, the parents, the ability to make health care decisions for your child if they are unable to do so themselves.
  • Durable Power of Attorney is like the Health Care Proxy, but for financial versus health care decisions.

Without these documents, you would need to seek the permission of the courts to obtain the authority of your child’s health care and financial affairs, and clearly this is not ideal.

Some planners will suggest a Will for your child. I feel that it would be nice, but not as important as the documents listed above.

It may appear that these legal documents are overkill regarding the impact of your child turning 18 and going off to college, and maybe you are correct.  However, I view it more like insurance.  You never really want to deal with it until you need to, then you will be extremely grateful that you have it.

Bronfman E.L. Rothschild is a registered investment advisor (dba Bronfman Rothschild). Securities, when offered, are offered through an affiliate, Bronfman E.L. Rothschild Capital, LLC (dba BELR Capital, LLC), member FINRA/SIPC.
Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP®, Certified Financial Planner™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. 
This information should not be construed as a recommendation, offer to sell, or solicitation of an offer to buy a particular security or investment strategy. The commentary provided is for informational purposes only and should not be relied upon for accounting, legal, or tax advice. While the information is deemed reliable, Bronfman Rothschild cannot guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with regard to the results to be obtained from its use. Past performance does not guarantee future results. © 2017 Bronfman Rothschild

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