by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA

When a child becomes 18 years old, he or she becomes an adult.  Prior to that time, the child is a minor and his or her parent is also the natural guardian and had the authority to make decisions for that child.  What should a parent be thinking about when a child turns 18?

  1. If the child has capacity, it is helpful if the child executes the following documents:
  • Medical Power of Attorney. This is sometimes called an Advance Directive or a Living Will.  The child can grant to the parent or parents or siblings the right to make medical decisions on behalf of the adult child by executing an Advance Directive.
  • HIPAA Authorization. Under the Health Insurance Portability and Accountability Act (HIPAA), a healthcare provider is not permitted to give medical information to anyone other than the patient unless a written authorization is in place.  The child should sign a HIPAA Authorization Form.
  • Durable Power of Attorney. A General Durable Power of Attorney is used to make financial decisions.  If the child has capacity to appoint a parent or sibling as agent under a General Durable Power of Attorney, Guardianship can often be avoided.
  • Family Education Rights and Privacy Act (FERPA). FERPA is a federal law protecting the privacy of student education records.  Once a child reaches 18, the school must have written permission from the student to release information concerning the student’s education record to the parent, subject to certain exceptions.  The child should sign a FERPA Consent Form.
  • Supported Decision-Making Agreement. Under a Supported Decision-Making Agreement, an adult child having marginal capacity can execute an agreement appointing a decision-maker to make decisions on behalf of the adult child and communicate those decisions to the appropriate individuals. Most states are encouraging the use of these agreements, and some states have laws requiring courts to consider them prior to the appointment of a guardian.  The purpose of the agreement is to avoid appointment of a guardian or to terminate a guardianship where appropriate.
  • Simple Will. If an adult child owns assets, his or her estate will be subject to the probate process, and it is much simpler for the individual to have a Will than to have assets pass under the intestate statutes.
  1. Custodial Accounts. Under the Uniform Transfer to Minors Act (UTMA), ownership of a custodial account established under the Act passes to the minor reaching adulthood.  The default under UTMA is age 21, unless the person establishing the account designates another age between 18 and 21.  Under the Uniform Gift to Minors Act (UGMA), an adult is defined as a person 21 years of age or more.  Under UGMA, the gift is irrevocable and conveys title to the minor immediately.  Ownership of a custodial account may prevent a child from receiving important public benefits such as SSI and Medicaid.  Where there is a disabled child, UGMA and UTMA accounts should be avoided and if those accounts exist they must be addressed as soon as possible.
  2. If an adult child is incapacitated and unable to execute the documents indicated above, a Guardianship will be necessary for the parents to continue to make decisions about the adult child’s medical care, living situation, and other financial decisions.  There are two types of Guardianships in New Jersey.  One is Guardian of the Person, and the other is Guardian of the Property.  Guardian of the Person is in charge of personal and medical decisions on behalf of a mentally incapacitated individual.  The Guardian of the Property is in charge of making financial decisions on behalf of such an individual.  One may serve as Guardian of both the Person and the Property.
  3. SSI/Medicaid. Children with disabilities are entitled to Supplemental Security Income (SSI) from the Social Security Administration.  In calendar year 2023, the maximum benefit for an individual is $914 from the federal government, and a $31.25 supplement from the state, for a total of $945.25.
  • Definition of Disability. At age 18, the definition of disability for SSI changes.  Under age 18, an individual is disabled if they have a medical determinable physical or mental impairment (including an emotional or learning problem) that results in marked and severe functional limitations and can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months.  At age 18, the definition of disability changes to a medically determinable physical or mental impairment (including emotional or learning problems) that:  results in an inability to do any substantial gainful activity (SGA) and can result in death or has lasted or can be expected to last for a continuous period of not less than 12 months.
  • Deeming. Prior to age 18, the income and assets of a parent are deemed to the child for determining financial eligibility for SSI.  At age 18, parental deeming ends and only the income and assets of the disabled child are considered for determining financial eligibility.  Many parents of children with disabilities do not understand this and do not apply upon the child attaining age 18.
  • Application for SSI. An application for SSI should be filed as soon as possible after the child’s 18th birthday.  In many cases, the parent has applied for SSI for the child prior to the child’s 18th birthday and been rejected.  The reason for the rejection is usually the deeming of parental income and assets. In those cases, another application must be made after the child reaches age 18.