By Bobby Reamer, MBA, CEPA®, CFP® | Founding Partner, Keel Financial Partners
Eighteen is a big deal. As a father, I know how that milestone feels — pride, excitement, and maybe a quiet awareness that the relationship between parent and child is shifting into something new. Your child is stepping into independence, and that is exactly what you raised them for.
What most families do not realize, until they need to, is that turning 18 also changes the legal relationship between parents and children in ways that matter enormously. The day your child turns 18, you lose automatic access to their medical and financial information. You cannot speak to their doctor, their bank, or their university without their explicit permission.
That is not necessarily a reason for alarm. It is a practical planning matter families may want to address, and in many cases the basic documents can be put in place relatively quickly with the help of a qualified attorney.
What Changes at 18?
Under federal privacy laws, including HIPAA for certain medical information and FERPA for certain educational records, an 18-year-old is generally treated as a legal adult. As a result, a parent may no longer have automatic access to certain health or school records without the student’s or child’s consent, subject to applicable law, institutional policies, and limited exceptions.
In everyday life, this may not come up often. But families sometimes encounter situations where a young adult is away at school, traveling, or temporarily unable to handle a medical or financial issue, and parents discover they cannot easily obtain information or act on the child’s behalf without prior authorization. Having appropriate documents in place may help reduce confusion and delay during those situations.
These are the kinds of situations families often consider when deciding whether to put basic authorizations and planning documents in place before a child leaves home. A qualified estate-planning or elder-law attorney can help determine which documents make sense based on the family’s circumstances and state law.
The Documents Every 18-Year-Old Needs
Healthcare Proxy (Healthcare Power of Attorney)
In many states, this document designates someone to make medical decisions on your child’s behalf if they are unable to do so themselves. For many young adults, that person may be a parent or another trusted adult. Requirements vary by state, so families should consider using an attorney or a reputable legal service and confirming local requirements.
HIPAA Authorization
This is separate from a healthcare proxy and can authorize named individuals to receive certain protected health information. Even where a healthcare proxy exists, providers may still look for a separate authorization for routine information sharing. Both documents are commonly considered as part of a basic planning package.
Durable Power of Attorney
This can authorize someone to handle certain financial or legal matters on your child’s behalf if they are unable to do so. For a college student studying abroad, recovering from an injury, or facing another period of incapacity, this document may allow a parent or other trusted person to assist without additional delays, depending on the scope of the document and applicable law.
FERPA Release
This may allow a college or university to share certain educational records with named individuals, subject to the school’s procedures and applicable law. Many institutions provide their own FERPA release through the student portal or registrar’s office.
Starting a Financial Foundation
Turning 18 is also the right moment to start building real financial habits. Not because your child needs to have it all figured out, but because the habits formed in the first few years of financial independence tend to stick.
A checking and savings account in their own name. At 18, opening an independent account is a natural step. Look for accounts with no monthly fees and a user-friendly mobile app.
A credit card with a low limit. Building credit takes time, and starting early matters. A secured card or a student credit card with a modest limit, used for small regular purchases and paid in full each month, begins building a credit history without the risk of significant debt.
A basic budget. Not an elaborate spreadsheet, but a simple understanding of what is coming in, what the fixed obligations are, and what is left. The habit of knowing where money goes is foundational to every financial decision that follows.
An introduction to saving and investing. If your child has earned income and otherwise meets eligibility requirements, a Roth IRA may be a useful long-term savings tool. Contributions are made with after-tax dollars, and qualified withdrawals may be tax-free. Because contribution limits and income rules can change, families should confirm current IRS rules or speak with a tax professional before opening or funding an account.
A Practical Checklist Before They Leave
Legal documents
- Healthcare proxy completed and signed
- HIPAA authorization completed and signed
- Durable power of attorney completed and signed
- FERPA release filed with their university
Financial basics
- Checking and savings account in their own name
- Credit card established and understood
- Basic budget in place
- Roth IRA opened if they have earned income
Practical preparedness
- Health insurance coverage confirmed and understood
- Emergency contacts and important information shared with parents
- Location of key documents known by both child and parents
The Bigger Picture
Watching a child step into adulthood is one of the great privileges of being a parent. This checklist is not about holding on. It is about making sure they are as protected and prepared as possible for the life they are stepping into.
If this milestone is approaching in your family, it may be worth discussing the legal, tax, and financial considerations with qualified professionals as part of your broader planning process.
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Disclosures: This material is provided for general informational and educational purposes only and is not intended as, and should not be construed as, personalized investment, legal, tax, or financial planning advice, or as a recommendation to take any particular action. The examples discussed are general in nature and may not apply to every individual or family. Readers should consult their own attorney, tax adviser, and financial professional before making decisions based on their specific circumstances.
Financial planning is a process that may include reviewing your current financial situation, goals, and objectives and discussing possible planning concepts; no strategy can guarantee success or ensure that objectives will be achieved.
Artificial intelligence (“AI”) tools have been used to assist with drafting, formatting, summarization, or editing this material. Any AI-assisted content has been reviewed by Winthrop Wealth prior to use. AI tools are not used to provide personalized investment advice, recommendations, or individualized financial planning analysis.
