In the eyes of the legal and financial world, an 18th birthday represents a major shift. Motley Fool Contributing Writer Michele Lerner’s latest DailyFinance story, “Parents: Are You Legally Ready for Your Kids to Be Adults?” utilizes tips from McManus & Associates to show families steps that should be considered when a child turns 18.
Reporter Melody Warnick recently turned to McManus & Associates to get a better understanding of financial challenges faced by emancipated minors — few and far between, but common for child actors, young professional athletes and teen pop stars, for example. In her CreditCards.com story, “Emancipated minors may get freedom, but don’t count on credit,” Warnick explains that emancipation is a legal proceeding that grants adult status to a teen and frees her to make her own medical decisions, sign contracts and otherwise manage her life — and finances — independently.
A quote from John O. McManus, top-rated lawyer and founding principal of McManus & Associates, helps kick off the piece:
“There are instances when there’s a child actor or someone like an Olympic athlete, and the parents are managing their assets, and there’s a concern that they’re not acting in their best interest,” explains John McManus, an attorney and owner of McManus Legal, based in New York City. “The child also has to show that, despite their chronological age, ‘I am deemed to be independent and ready to make decisions on my own.'”
Based on over two decades of experience as a practicing attorney, John goes on to point out that:
“Emancipation is very, very unusual,” says McManus. “[The bar] has very little experience in the mechanics of it, because it’s just a very infrequent thing to see.” In some states, there aren’t even set procedures for allowing minors to petition for independence, let alone sufficient case history to establish guidelines for independence.
But there are things that minors, emancipated or not, can do to build credit and establish a solid financial footing for themselves, says Warnick:
1. Become an authorized user.
2. Sign a contract.
3. Get a debit card.
4. Talk to your financial aid adviser.
5. Get help.
Check out Warnick’s full story for an explanation of each item on this list. And to learn more, listen to a recent client conference call held by the firm on the “Top 10 Planning Issues for Recently Emancipated Children (over 18) and Minors.”