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From a financial perspective, it's not when your adult children move out of the house that matters. It's when they move out of your checkbook that counts.

Legal Rules
Parental responsibility for supporting children financially typically ends when the child achieves legal age or graduates from high school. However, some parents choose to extend their financial responsibility past that age by co-signing for rental leases, loans and credit cards.

Legal and financial experts say you should avoid co-signing. They say that a better option is to help your adult child with gifts or loans for a specific amount. Use a written agreement to clarify the amount of the gift, its purpose and whether it must be paid back. Limiting yourself to that option is sometimes difficult, especially now that many credit card issuers can't provide cards to people under the age of 21 unless they have the income to pay bills or a co-signer over the age 21.

Insurance Issues
Transferring ownership of a vehicle to an adult child's name also transfers liability, and that includes the legal responsibility for insuring it. This helps limit your obligation even if you help pay the premium.

Health insurance is a different matter. You may want to cover your child under your employer's health plan, as it typically costs less than individual coverage.

The federal Affordable Care Act passed in early 2010 extends eligibility for family coverage until young adults reach age 26, even if they have married or left school. Visit the U.S. Labor Department for details. Check insurance rules in your state, which may extend coverage even longer.

Focus On Necessities
If your child asks for additional help, try to focus on necessities. Being mindful of the difference between "needs" and "wants" simplifies matters as you ease your child into financial autonomy. And tell your kids to visit Alliant Advantage to see how they can achieve their own financial goals and independence.

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Source: CUNA