Even if you aren't watching a little one get on a big yellow bus, fall is a time for fresh starts and getting organized. When your kids were younger, you bought lunchboxes and notebooks. Now that they're older, whether you have one who is turning 18 or you've packed some off to college, there is still planning and organizing to do to protect your future and theirs.
Rethink your plans
Now that you have adult children (how did that happen?), it's time to update your estate plan.
1. Last will. As your children grow, your life changes. When your children were minors, you needed to make sure you had guardians in place for them. Now that they're grown, your estate plan needs to be tweaked. Revise your will to remove the guardian provisions and consider naming your adult children as executors. Also, if you've created trusts in your will when your children were younger, you should consider whether they are still necessary. Maybe they are old enough to handle any assets they receive from you on their own.
2. Living trust. This also is a good time to revise or create a living trust. This document allows you to manage your assets during your life and distribute them after your death. Your adult child could be your successor trustee (who takes over managing the trust after your death) or you may want to change the terms of distribution for the trust, determining when your kids can get their inheritance. For instance, you could make an inheritance conditional on your child's finishing college (talk about a great incentive!).
3. Living will. Now that you have adult children, you also may want to include them in your living will, giving them authority to make health care decisions for you should you become unable to do so. It may be hard to imagine an 18-year-old making these tough decisions, but keep in mind that this document is designed to stay in place for the rest of your life, so you definitely want to put provisions in place so your kids are able to help you as you age.
4. Durable power of attorney. Adult children also can be named in your power of attorney, so that they can handle financial, legal, and business decisions and transactions for you should you become incapacitated.
Get the ball rolling
If you've only been thinking about writing a will, living trust, living will, or power of attorney and haven't been able to find the time to get it done, fall is the perfect time to get started. Your child has grown and you can think long term about your life plans, your goals, and your family's future.
Kids need to plan, too
It might seem strange to talk to your child about getting a will, living will, or power of attorney, but once your child turns 18, he or she is an adult and you have no authority to make decisions for him or her. This can be scary to think about, particularly if your child is away at school. If he gets sick, you want to be there for him. Sit down with your child and set up a living will so that you can make health decisions and be informed about medical situations when he needs you.
It's also a good idea to set up a power of attorney that gives you the authority to handle financial and legal decisions for your child. If she's hurt or sick, you can access her bank account, pay her bills, accept her student loans, pay her tuition, or withdraw her from classes if necessary.
Most young adults don't think about creating a will, but no matter how many or how few assets your child has, a will allows him to control them and to make decisions about what happens to them if he should pass away. Putting a basic will in place is a good idea for any young adult. If nothing else, it's a great exercise in teaching them responsibility.
Finish what you've started
If you've purchased a last will, living trust, living will, or power of attorney but have been dragging your feet on finishing it, there's no time like the present to finish it up and make it official. Make sure all the time and thought you've put into it comes to fruition. The best thought-out estate plan means nothing until it's signed and legal.
Find out more about Estate Planning Basics