Graduation: A Time of Celebration and Increased Responsibility

Graduation: A Time of Celebration and Increased Responsibility

June is traditionally considered to be graduation season. Though children and grandchildren would like to celebrate the end of school, this is also the end of dependency on their parents.

Yes, graduation is an academic milestone and an important occasion to celebrate and acknowledge the accomplishment. The importance of this milestone goes far beyond a sentimental moment in time when a teen leaves school or potentially moves out of the house. This next chapter of life also means new legal freedoms, no more parental supervision, and many legal and financial responsibilities.

College graduation typically signifies the end of parental support and moving out of the house. However, the more legally and financially significant graduation is from high school since so many changes occur at the age of 18, the average age of students when they graduate 12th grade.

At 18, many life decisions no longer need parental consent such as getting a tattoo, a body piercing, voting, buying a house and getting married. This is because in the eyes of the law, on their 18th birthday a child is now considered an adult.1 This is why it is important to share with your graduate that the new freedoms they are able to enjoy also come with stronger
consequences for one’s actions­—like going to jail, getting sued, or gambling away their savings or inheritance via a sportsbook.

While turning 18 comes with many new opportunities, rights, and responsibilities, there are a few restrictions that remain, like purchasing and drinking alcohol (21 years old), going to a casino (21 years old), and renting a vehicle (20 to 25 years old).2

Regardless of the depth of your love of the youth in your life, upon graduation you need to ensure that you are protecting yourself legally and financially from accidental or intentional scenarios, and in turn help them set up their estate to also protect themselves. Legal and financial protection is even more important when trusts or an inheritance are involved.

One seemingly small first step of independence and legal responsibility is to change a vehicle’s title into their name. Prior to turning 18, a vehicle must be in a parent or guardian’s name because minors are not allowed to take title. Even if the youth is currently making good choices, that sometimes changes with the newfound freedoms of being an adult. College stress and peer pressure of the new environment also can have a negative effect on seemingly ‘good kids.’ If your kid gets into an accident, jointly titling the car with your name means that the other driver can not only go after your kid for money, they can sue you.3 Why tempt fate in these new life scenarios when you can ensure that legal protections are in place for you and your spouse. We are not saying the associated financial responsibilities need to change, unless you want them to, but the legal aspect is a no-cost protection for you and a new level of ownership and responsibility for them.

Note: A word of caution here about vehicle title changes. When you change title to your children, some auto insurance companies will kick your children off your existing family automobile coverage plan and force them to purchase their own insurance plan, resulting in much higher premiums. Because not all insurance companies have the same policy and many companies offer a family rate even if the children have title to their own automobile, be prepared by asking your agent ahead of time so you can shop for a new auto insurance company if necessary.

Federal privacy laws are another area of concern at 18. While children are under 18 parents and guardians are responsible for their healthcare. After your children reach 18 they are responsible for their own healthcare. This means parents and guardians no longer have the power to access childrens’ medical records, consult with their physicians, give consent for medical treatment, or even decide if it is time to remove them from life support systems. Sadly we had a client learn firsthand how serious the medical profession takes privacy laws when her son was involved in a traffic accident out of state and she was denied access to the doctors handling his hospital care. To avoid such a difficult situation for children, we recommend right after their 18th birthday to send them to a family estate planning attorney and prepare their own Living Will and Health Care Advance Directives. In these documents each child should authorize their parents or guardians to have the power to consult with their doctors and make healthcare decisions on their behalf if the child is unable.

While the child is there with the attorney, we also recommend they should be educated on what a durable power of attorney document is and to make sure to also name their parents or guardians as the agents. This way if a child was unable to manage their financial affairs, like signing their tax return, challenging landlords in legal proceedings, or selling their vehicle, parents would have the power to do it on their behalf.

These specific recommendations are things Scott and Adriana did when their children turned 18. It is never too late to take action if you already have a child or grandchild over 18. Do yourself and your child a favor and take care of these tasks now to prevent legal and financial issues in the future and also to help them gain responsibility for these decisions and actions in their lives.