Wealth Planning

Protecting Your Children When They’re No Longer “Kids”

September 28, 2023

Protecting Your Children When They’re No Longer “Kids” - Aspiriant Wealth Management

What You Can Do to Protect Your Child

It’s your child’s eighteenth birthday. You are proud of them for reaching adulthood. But then it dawns on you—they’re going away soon. Until now, if something happens to your child, you’d be the first to be contacted. However, that won’t be the case any longer now that they are adults.

Despite the legal classification of your child as an “adult,” and despite your trust in them, you want to protect them just a little longer—but how? Luckily, there are legal forms that your child can fill out to help make it more likely that, should anything happen, you’d be informed and are able to make decisions for them. These forms include:

  • Advance Health Care Directive
  • HIPAA Authorization
  • Durable Power of Attorney for Financial Matters
  • Authorization to Access and Control Digital Assets

Advance Health Care Directive (AHCD)

Although it is a situation that no parent wants to contemplate, if your child were to become incapacitated, someone would need to be able to carry out your child’s medical wishes on their behalf. An AHCD lets your child name someone as their agent to make health care decisions for them. The form will also inform you of your child’s health care preferences, if any, and will give instructions about their end-of-life choices. This allows you to make decisions that best align with your child’s wishes.

HIPAA Authorization

A HIPAA Authorization form will allow your child’s medical provider to disclose your child’s otherwise protected health information if you are named their agent. This form is useful when the agent needs to make a determination regarding the child’s capacity in conducting their legal, financial, and business affairs, among other matters.

Durable Power of Attorney (DPA)

A DPA will allow you to make financial decisions on your child’s behalf if they name you as their agent. A DPA can be general or specific. A general DPA would give you broad authority over your child’s financial assets, while a special or specific power of attorney would only allow you to make decisions over certain limited matters. A DPA can also be effective immediately or “spring” into action only upon incapacity (the latter known as a Springing Power of Attorney).

Authorization to Access and Control Digital Assets

Similar to a DPA, the Authorization to Access and Control Digital Assets may allow your child’s designated personal representative to access their digital assets, such as the files stored on their computer or online accounts.

Lastly, a complete core estate plan is advisable if there are any assets in your child’s individual name.  A core estate plan includes a will and living trust, in addition to the Advance Health Care Directive, HIPPA document, and Power of Attorney.

Insurance Coverage

Another way to protect your child is to thoroughly review your insurance policies. Once your child is officially an adult, whether they go off to school or take a gap year, you’ll want to check your policies to verify coverage. The most common policies are homeowners and auto insurance.

Homeowner’s Insurance

Parents should review your homeowner’s insurance policy to see if your student is covered under the policy while away at college. Depending on the teen’s living situation, they may or may not be eligible. College students living on campus are typically covered under their parents’ policy. However, if they are living off campus, they may not be fully covered if at all. Additionally, if you are a co-signor for the off-campus apartment, you will need to update your insurance coverage to ensure the apartment is listed on the policy. We recommend contacting your insurance agent to ensure your child is covered.

Auto Insurance

Parents typically remove their children from the auto policy while they are away at school because they are without a car. However, this may not be a good idea. Suppose your child is involved in an accident while driving somebody else’s car, such as a designated driver, and the vehicle owner has insufficient coverage limits on their auto insurance policy. In that case, they will be legally liable for any claims not covered by the insurance policy. Or, in the event your child is injured as a passenger and the owner of the car does not have sufficient liability limits, your child won’t have uninsured or underinsured motorist coverage.

If your student takes their car to college, you could also consider registering the vehicle in your child’s name and obtaining a separate auto insurance policy for them. Keeping your teenage on your insurance policy may present a significant risk of increased insurance rates and exposure to liability in the event your child is involved in a car accident. You can protect yourself from such claims if your child has a separate auto insurance policy. Keep in mind this may become a more expensive alternative if doing so qualifies you from the multi-car discount.

To learn more about the different types of insurance coverages you should keep in mind, check out our Making It On Your Own: Insurance article.

Final Takeaways

Being a new adult can be a very exciting time for your child. However, it is also a vulnerable time for them. Consider consulting an attorney to draft the above forms or your insurance agent to review your current policies. In doing so, you can protect your children a little longer with peace of mind as they enter a new stage in their life.


Lydia Tran

Fathom Author

Gregory Law

Fathom Author


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Phil-Kastenholz-square

Phil J. Kastenholz CFA®, CPA

Director in Investment Strategy & Research, Partner

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