When A Child Turns 18: The Gap In Your Family’s Estate Plan

Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For families with trusts, closely held businesses, or substantial assets, the milestone is also a natural checkpoint for the broader estate plan.

For many parents, a child turning 18 is a milestone marked by a birthday celebration, a college send-off, or the first steps toward greater independence. It is also a legal turning point that can create an unexpected gap in an otherwise carefully designed estate plan.

If a young adult becomes seriously ill, is involved in an accident, or needs someone to handle financial or administrative matters while away from home, parents may find that they cannot step in without additional legal documentation.

This issue can be particularly important for families who have spent years carefully planning for their children’s financial future. Parents who own businesses, have substantial assets, or have established trusts and other estate-planning structures should ensure their planning addresses not only what happens to their assets but also who can assist their children once they become legal adults.

A Durable Power of Attorney for Financial Matters

A durable power of attorney allows one person to authorize another to act on their behalf regarding financial and other legal matters. For a newly 18-year-old child, a properly drafted power of attorney can allow a parent or another trusted individual to assist with matters that otherwise may require the child’s direct involvement.

For example, a parent may need to help address a bank account, insurance claim, tax matter, student loan, lease, or other financial issue if the child is unable to handle it personally. Without a power of attorney, the parent may have limited ability to act, even if the parent is paying the child’s expenses or has historically managed the family’s financial affairs.

A durable power of attorney should be carefully drafted to reflect the family’s circumstances and the young adult’s wishes. Parents should also understand that a power of attorney does not make the child a minor again or eliminate the child’s control over their own affairs. It simply provides a mechanism for the child to authorize someone else to act when appropriate.

Health Care Decisions: Health Care Proxy and Directive

Medical decisions present a similar concern, but the stakes can be much higher. Once a child turns 18, parents generally cannot assume that they will automatically be able to make health care decisions if their adult child is incapacitated.

A health care proxy or health care directive allows an adult to designate an individual to make health care decisions on their behalf if the individual becomes unable to do so. Depending on the document and applicable law, it may also address the person’s wishes regarding treatment and end-of-life care.

For parents, the practical importance is straightforward. If an 18-year-old is seriously injured and unable to communicate, having the appropriate documents in place can help ensure that a parent or other trusted person has clear authority to participate in medical decision-making.

This is not limited to college students. An adult child who remains at home, enters the workforce, travels abroad, or otherwise begins living independently faces the same legal transition.

HIPAA Authorization: Access to Medical Information

Even when a parent is designated to make health care decisions, access to medical information is a separate concern. The federal Health Insurance Portability and Accountability Act (HIPAA) generally restricts health care providers from disclosing protected health information without appropriate authorization. As a result, parents may discover that a doctor’s office, hospital, or other provider will not discuss an adult child’s medical condition with them simply because they are the child’s parents.

A HIPAA authorization can permit designated individuals to receive specified medical information. This can be especially important in an emergency, when parents may need information from doctors while coordinating care for their adult child.

The HIPAA authorization and health care proxy serve different purposes, so families should consider having both. One addresses access to information; the other addresses health care decision-making when the individual cannot make decisions independently.

Use the 18th Birthday as an Estate Planning Checkpoint

The transition to adulthood is also a useful opportunity to revisit the family’s broader estate plan. For families with substantial assets, trusts, closely held businesses, or planned gifts, a child’s legal transition into adulthood may have consequences that extend well beyond health care and financial powers of attorney.

For example, parents may have established trusts for their children that contain provisions tied to particular ages or life events. A child turning 18 may also be approaching a point at which they will have greater control over certain inherited or gifted assets. Families with business interests should consider whether the child’s changing legal status affects ownership, governance, succession, or other arrangements involving the family business.

Parents should also review beneficiary designations and planned gifts to determine whether existing arrangements still reflect their intentions. The goal is not necessarily to make major changes every time a child reaches adulthood. Rather, the milestone provides a natural opportunity to confirm that the existing plan still works as intended.

Planning for Independence Does Not Mean Planning for Distance

Preparing these documents does not mean parents are taking away their child’s independence. In many respects, it is the opposite. A durable power of attorney, health care proxy, and HIPAA authorization allow an adult child to designate who should be trusted to assist if it becomes necessary.

For families sending a child off to college, the weeks leading up to that transition can be a natural time to address these documents. The key is to have the conversation before an emergency occurs.