12 year old starting fly fishing

Flyline older than the fisherman?  Replace it.  You can get some SA Air Cel line for $25 almost anywhere that sells fly stuff.  Backing is worth getting too, though the old stuff there might work.  Its cheap though so you might as well grab a spool.

Cortland has a chaep line out now, sell it at walmart, at least the walmarts in my area sell it. I bought some to try, it works good and would prob be perfect for that set up.

I would think about replacing that 18 tr. old Berkley also. You can get a good rod for a beginer for a reasonable price if you shop around. A 18 year old rod who knows what the materials are in it. The last thing you want to do is give him something that is going to discourage him. If you can't do it right now I'm sure if you enroll him in a class there will be equipment there that he will be able to use. I help with a Fly Fishing School and I know all the instructors have modern equipment that the students can use. Some of the problems the students start out with, are either bad equipment or equipment that does not match up . Right away they start to have problems casting and they become discouraged. Then when they get a good matched rod and line in their hands they become a different person. It doesn't have to be expensive just make sure it matches up  . You want this to be fun not a bad experence for him.

I agree with most here, pick up a cheap new line at****s or Walmart.  For a beginner he will not notice the difference between a $70 Rio line and a $20 Walmart line.  After you have the line go from there, your investment will be small and you will know shortly whether he enjoys it or not.  I see no reason to spend any more money than that until you see how he responds to the sport.  If he takes a shining to it then consider upgrading the setup.