Most parents only consider the topic of health care proxies when it comes to their own affairs. But many people don't know this: Such arrangements can also be important for children. Particularly in unforeseeable situations - whether due to illness, accident or another emergency - early protection prevents important decisions being made by strangers.
Many parents assume that, as legal guardians , they automatically have all the rights and obligations for their child. But as soon as they are no longer able to make decisions themselves, things can get complicated. Who takes care of the child if the mother or father is absent? Who is authorized to deal with the authorities, make medical decisions or handle financial matters? Without a clearly regulated power of attorney or custody order, uncertainties and lengthy legal proceedings can arise in an emergency.
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It becomes just as problematic when children come of age. Although they gain full legal capacity on their 18th birthday, this also means that parents automatically lose any right to have a say. Without an appropriate power of attorney, they are no longer allowed to intervene in health matters, hold medical consultations or have access to their child's accounts or contracts - even if they still live at home or are financially dependent on them.
One thing is clear: early provision is not just a nice-to-have, but essential to protect both minor children and adults. In this article, you'll find out what legal options are available, what you should look out for and why it's not just about health, but also about financial security.
Legal basics: What parents need to know
Many parents assume that they can automatically settle everything as long as their child is a minor - but this is a misconception. If one parent dies or falls seriously ill, the family court automatically springs into action. If the remaining parent does not have sole custody, a suitable guardian is sought - and this person is not necessarily a close relative. In some cases, the court decides on the guardianship and even the placement of the child, even if there are living grandparents, aunts or uncles.
It is just as problematic in the financial area:
- Who may dispose of the child's money?
- Can grandparents or godparents manage the assets?
- What happens to savings accounts, custody accounts or other investments?
All these decisions are made by courts and authorities without prior regulation - not by the family itself.
The right protection for minors: custody order and care order
Two documents are therefore particularly important to ensure that the child ends up in the right hands in the event of an emergency:
- Custody order: This is where parents specify who should have custody in an emergency. The family court is guided by this wish as long as there are no serious reasons against it.
- Care directive: If a parent becomes incapacitated, this document designates a person who is authorized to make all important decisions - for example regarding medical treatment or financial matters.
These two regulations prevent parents from placing the welfare of their child in the hands of strangers. However, the issue remains relevant even after the 18th birthday - because parents automatically lose their right to have a say. Incidentally, in addition to a health care proxy, accident insurance for children can also be useful to cover financial risks in the event of a sudden emergency.
Coming of age and new challenges: Why 18-year-olds also need a health care proxy
Many parents are surprised when they realize that they can no longer legally decide anything for their child when they turn 18. But that is exactly what happens: When the child comes of age, custody ends automatically - regardless of whether the child is still at school, studying or financially dependent on their parents.
What does this mean in practice?
- Parents no longer have access to their child's medical records - even in emergencies.
- Banks refuse to provide any information about accounts, custody accounts or insurance policies.
- Authorities are no longer allowed to pass on information to parents, even if the child still lives at home.
Many young adults are not aware of these consequences - and this is precisely where the power of attorney for adult children comes in.
Lasting power of attorney vs. general power of attorney: What is the difference?
While a custody order only applies to minors, adult children need a power of attorney if parents are to continue to make decisions for them. Without such a power of attorney, parents are no longer allowed to access bank accounts, make medical appointments or take care of legal or financial matters.
There are various options here:
- Lasting power of attorney: explicitly regulates which areas are covered (e.g. health issues, finances, contact with authorities).
- General power of attorney: A comprehensive power of attorney that covers all matters, but also harbors risks such as the sale of assets without consultation.
- Care directive: If a person is no longer legally competent, this document determines who may take over legal care.
- Living will: Specifies which medical measures the child wants or rejects in an emergency.
- Banking power of attorney: Gives parents the opportunity to continue to oversee finances if the child has no experience with money matters.
Without these regulations, parents are excluded from important decisions from one day to the next - which can lead to problems in an emergency. Even simple things such as access to contracts, online accounts or the email address stored for important notifications can become unexpected hurdles.
Particularly important: parents should also make long-term provisions for financial issues. After all, a large part of financial security for children lies not only in legal documents, but also in a smart financial strategy. You can find out how to protect your child in the long term - even beyond their 18th birthday - in the next section.
Financial security: Why it's important to make provisions beyond your 18th birthday
When it comes to financial security for their children, many parents think primarily of savings accounts or traditional custody accounts. However, hardly anyone takes into account the fact that coming of age brings not only legal but also financial challenges. If you don't make provisions early on, you run the risk of losing hard-earned capital through ill-considered decisions.
The problem: Financial independence, but no experience
At the age of 18, children are officially adults - and therefore have full legal capacity. This means that
- They can dispose of their money freely, even if they have little experience with long-term planning.
- Savings accounts, deposits or gifts are automatically transferred to them - parents no longer have any control.
- Rash spending or risky investments can erode your savings within a very short space of time.
A classic example:
- Parents have paid into a deposit for their child over the years to create a solid financial cushion for studies or training.
- On their 18th birthday, the child can freely dispose of the capital.
- Instead of thinking long-term, money is spent on short-term wishes.
- The long-term financial security is gone.
Tip: Timely financial planning protects against later risks
Dealing with money is a real challenge for many young adults. Suddenly available sums from savings accounts or deposits can lead to young adults making ill-considered financial decisions - be it the latest smartphone, expensive brand-name clothes or spontaneous trips.
Many parents worry about precisely this when it comes to financial provision for their children. They want to build up a solid financial cushion that will open up real opportunities for their child later on - for example, for education, their first home or long-term security.
At the same time, however, there is a concern that the money that has been painstakingly saved will be spent thoughtlessly after the 18th birthday and that the entire provision will come to nothing. Because without clear rules, an 18-year-old can liquidate the entire capital of a custody account - with possible consequences for long-term financial security.
So how can you ensure that your savings really serve the long-term well-being of your child without losing flexibility? This is exactly where a well thought-out investment strategy comes in.
5200+ parents trust Invest4Kids
Tobias Otto
07 November 2024
Susanna's advice was very clear and pleasant, open and honest. She made me feel understood. She gave me comprehensive and individual advice. She answered all my questions, took a lot of time for me and responded to my personal situation. I have already recommended Invest4Kids to my friends!
The solution: control and tax exemption with Invest4Kids
The Invest4Kids concept offers a clever alternative to traditional investment strategies. Thanks to a tax-optimized insurance solution, income is reinvested without capital gains tax, allowing assets to grow efficiently. At the same time, individual advice ensures that the ETF selection is optimally suited to the family's financial situation and can be flexibly adapted to changing needs - without hidden costs or tax disadvantages.
A major advantage: parents retain the right to control the capital - even after their 18th birthday. This allows them to manage the savings sensibly even after they reach the age of majority and ensure that the money is used for sensible purposes rather than for spontaneous, ill-considered spending. Thanks to the tax advantages, more of the savings is left over so that the capital can grow optimally in the long term.
The advantages at a glance:
✅ Retain the right of determination: Parents continue to decide what the money is used for - be it for education, home furnishings or initial investments.
✅ No unnecessary tax deductions: In contrast to traditional custody accounts, the capital remains invested in a tax-optimized way over the long term.
✅ Maximum flexibility: the investment can be adapted to changing life circumstances without tax disadvantages.
One thing is certain: without a well-thought-out financial strategy, even the best pension plan can come to nothing. But with a smart children's savings plan, parents can ensure that their child is in the best financial position even after their 18th birthday.
Through the combination of individual advice, tax advantages and long-term control, Invest4Kids ensures that savings are not only preserved, but can also grow optimally.
Conclusion: Providing for children means not only legal, but also financial protection
Most parents not only want to protect their children, they also want to provide for a secure future. However, while many focus on legal documents such as a custody order or a health care proxy, the fact that financial security is just as important is often overlooked.
🔹 Without a clear regulation, capital that has been saved up with great effort can be spent uncontrollably on the 18th birthday.
🔹 Traditional custody accounts offer low entry costs, but can entail high tax disadvantages in the long term.
🔹 With Invest4Kids, parents retain the right of determination and at the same time secure all the tax advantages to allow their child's assets to grow in the best possible way.
💡 Good to know:
A traditional custody account may seem cheaper at first glance, but hidden costs and tax deductions can significantly reduce returns in the long term. Invest4Kids, on the other hand, not only protects the capital, but also offers flexibility and control.
If you want to protect your child not only legally but also financially in the best possible way, you should act now. Get a free consultation and plan your child's future with the best solution!
