Parents of young adults have some additional considerations to keep in mind when planning:
- Consider incorporating a trust into your estate plan. A trust can ensure a child’s inheritance will be managed appropriately, can specify how the money should be used for the child’s benefit, and can delay a child’s control over inherited assets until the child reaches an age when the child is mature enough to manage those assets properly.
- If your out-of-the-nest children are not as financially responsible as you wish they would be, a trust can protect an inheritance from the reach of a divorcing spouse, persuasive friends seeking loans, or creditors arising from credit card debt, a lawsuit, a failing business, or other issues young adults may encounter.
In addition to thinking about your own estate plan, remember that your young adult children are now considered adults in the eyes of the law, and should have their own legal documents. In particular, every young adult should sign these documents before heading off to college:
- A HIPAA Authorization that will ensure parents are able to obtain information about a child who gets sick or has an accident while at school. There’s nothing more frustrating to the parent of a college student than being told that Mom and Dad are not entitled to any information about their child who is in a hospital many miles away.
- A Health Care Proxy that will allow a parent to make health care decisions for a child if the child cannot do so because of illness.
- A Power of Attorney that will let you handle financial matters for your child (banking, income taxes, school loans, sale of a car) either because your child is not available or is ill.