Your child is now legally an adult! What comes next?
Parents are often so in the habit of doing things on behalf of their minor children — making doctor’s appointments, managing investments in custodial accounts, paying bills – that they are likely to forget they are no longer authorized to manage their children’s affairs after their children reach the age of majority.
What follows is a checklist of steps for you and your child to take now that he or she is a legally emancipated adult.
1. Execute an Advance Directive for Healthcare
While no parent likes to think about harm befalling their child, take a moment to think about what would happen if your child suffered an accident that left him or her hospitalized.
Having an Advance Directive for Healthcare in place allows you to be your child’s advocate and work with doctors to determine the appropriate course of treatment. This will include setting up:
- A living will, which outlines your child’s wishes regarding healthcare decisions,
- A Healthcare Proxy (aka Healthcare Power of Attorney or Healthcare POA), which is an agent (often a parent/guardian) that’s given the power to make medical decisions on your child’s behalf,
- And HIPAA Authorization, which allows doctors and other healthcare professionals to discuss your child’s medical records with the Healthcare Proxy/Healthcare POA.
TIP: If both parents are named as an agent, a best practice is to empower each to act independently of the other, in case one parent cannot be reached.
Further reading: How To Make A Living Will 2025 Guide – Forbes Advisor
2. Execute a Power of Attorney (aka “Financial POA”)
This authorizes one or more agents — again, often the parent/guardian(s) — to act on behalf of the child in legal and financial matters (e.g., authority to access the child’s bank account).
In the event that your child is disabled or unable to execute financial decisions, a Power of Attorney would authorize you to see that your child’s bills are paid, cancel memberships or subscriptions he or she would not be using, and even retain an attorney to bring a lawsuit on your child’s behalf against another party that caused the accident.
The Financial POA’s powers may be:
- “Springing,” which requires a court to certify the child is incapacitated before coming into effect, or
- “Durable,” which is in effect even when the child is not incapacitated. Durable powers of attorney are preferable, when possible, because they avoid the need for court involvement in an emergency.
Further reading: How to Set Up a Power of Attorney – US News
Side note: Do you need a lawyer to prepare these documents?
Not necessarily. States often have forms of Advance Directives for Healthcare and Powers of Attorney available that can be executed by filling in the names and information of the child and his or her agents. That said, it is never a bad idea to have a lawyer oversee the execution of the documents to ensure that they properly reflect your child’s wishes and that all necessary formalities are observed. Executing these documents typically requires notarization.
Remember, these documents are important as they remove legal obstacles that could prevent you from being there for your child when he or she needs you most.
Further reading (Texas residents): Advance Directives | Texas Health and Human Services
3. Provide Copies (or Originals) of Key Documents to Your Now-Adult Child
- Give your child copies or originals of important documents, such as their Social Security card and a birth certificate
- Provide your child with information on their insurance coverage, such as health insurance and auto insurance. Consider if your child will remain on the parent’s insurance or acquire their own.
Note: The Affordable Care Act allows adult children, even if married, to remain on their parent’s health insurance plan until age 26.
4. Convert Custodial Accounts
- Children gain full control of the assets held in custodial UTMA accounts in their names upon reaching the age of majority. However, in most states the age of majority for this purpose is not age 18, but age 21, and can be as high as age 25.
- The account custodian (usually a parent) should contact the financial institution holding the account to begin converting the title to the child’s name only.
- Custodial 529 plan accounts vest in the child at the age of majority (age 21 in Texas).
5. Register for the Draft, If Required
- Male U.S. citizens and some male immigrants between ages 18 and 26 must register with the Selective Service System.
- Failure to register is a felony and may impact your child’s ability to qualify for certain government benefits.
Bonus:
While these won’t apply to all new adults, here are a few more steps you can take to set up your 18-year-old up responsibly for adulthood, including:
- Executing a Will, particularly if your child has significant assets held outside of titled accounts with beneficiaries, such as personal property or real estate.
- Applying for a Credit Card as a first step to building credit (explore secure credit cards or adding your child as an authorized user on one or more of the parents’ cards).
- Working with a financial planner and advisor to manage investments on behalf of your child. If you have been managing investments on behalf of your child in a custodial account and your child would like you to continue to do so, contact your financial advisor to see if your child can give you trading authority over his or her accounts.
*The information presented here is not specific to any individual’s personal circumstances. FMP Wealth Advisers is not providing investment, tax, legal, or retirement advice or recommendations in this article.
**To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
***These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
