Helping your child prepare for the next phase of their life can be exciting, nerve-wracking, and a little bittersweet. Of course, there are practical considerations, too. Make sure you play your role as a responsible parent by supporting them as they form new financial habits, transition out of living at home, and plan for their future.
You are used to playing an active role in your child’s health, education, and other decisions. But once your child reaches the age of 18, legally, things change.
For one, you are accustomed to having access to all your child’s medical records. But once they reach the milestone of turning 18, the federal Health Insurance Portability and Accountability Act (HIPAA) dictates that their medical records and health information become accessible only to them as the patient. A release of information, sometimes known as a HIPAA Authorization Form, must be signed by your child for a doctor to speak to you about their care or health information, even if your child is still covered by your health insurance. To ensure a seamless transition from home, assist your child in finding a new primary care provider, and ask your child to transfer their medical records from their pediatrician to their new doctor. It is best not to wait until your child gets sick or injured so that no gaps in preventive or acute care will occur.
If your child is heading to college, you have likely committed to significant costs associated with tuition, housing, books, studies abroad, and more. Your child may also remain on your health insurance, covered by the premiums you pay. However, this new phase of life will mean that you have less control over your child’s financial decisions and lifestyle.
On the other hand, this is no time for laissez-faire parenting. Your child is in the process of becoming an adult, and, despite the mixed messages they might send you at times, they do still look up to you for support, guidance, and advice as they navigate the challenges of young adulthood.
One way you can remain actively involved in your child’s life is to teach them to make sound financial decisions. You can encourage them to learn to use a budget, spend responsibly, and be a good steward of their financial assets. It is also the right time to teach them the importance of relying on a team of trusted financial and estate planning professionals when it comes to staying financially healthy and legally protected. Let them know that managing an estate is an important responsibility that deserves the best professional help available.
Another consideration is whether your child has appointed someone to make important medical and financial decisions in the event they are unable to do so themselves. This authority is granted through a Financial Power of Attorney and a Health Care Power of Attorney. Now that they are an adult, it is important that these roles are filled since you do not automatically continue to hold these roles for them. When selecting individuals to serve as agents under either a Financial Power of Attorney or Medical Power of Attorney, your child does not have to name you, but they will need to designate someone who can step in if needed.
Transitioning away from the structure and support of home will be a big change for your young one, and for your entire family. It can be a thrilling time, as your child seeks out new passions, explores the world, and develops a strong character through hard work and perseverance. Don’t forget to prepare them with the legal tools and financial strategies they will need to be a success and to safeguard their future. We’re here to help - just let us know if you would like to meet or talk on the phone.