Estate Planning & Young Adults - What to Consider
Estate Planning & Young Adults - What to Consider
Estate planning, which includes documents such as a last will, living trust and a living will, is a very important aspect of life and can help families prepare for difficult, emotionally wrought scenarios. As our lives get busier and more complicated, estate planning becomes increasingly important, and not just for older Americans. Today, young adults should also consider preparing certain estate planning documents, in particular, financial and health care durable powers of attorney, and living wills, also known as health care directives.
When a child reaches the age of 18, he or she has officially become an adult in the eyes of the law. While there’s much to be celebrated at this important stage of a young person’s life, what if he or she suddenly was unable to make a very important legal, financial or health decision—and you were powerless to step in? Such situations can range from an inconvenience to life-threatening, but by discussing these matters early on and making a plan, you can be a part of your young adult’s life if, and only if, it becomes necessary.
Here are some estate planning tools to consider:
Financial Power of Attorney
A financial power of attorney lets you appoint someone you trust, such as another family member, to make financial decisions on your behalf. This is a document that can be activated when you are unable to make decisions on your own, or can start as soon as it’s signed. A power of attorney is “durable” if it remains effective if you are unable to make decisions on your own.
A financial durable power of attorney can allow the person appointed, known as the “attorney-in-fact,” to handle important legal and financial issues on the grantor’s behalf at any time. Let’s say there’s a business or financial situation involving your young adult, such as a passport or car registration renewal, but he or she cannot tend to it because of geography or some other circumstance (e.g. being away at college). A durable power of attorney allows you to act on behalf of your son or daughter. This could become especially useful if there’s an ongoing legal situation that requires action very quickly and your son or daughter cannot be there in person.
Families with a disabled young adult or a family member with special needs can also benefit from the security of a power of attorney.
A living will, or health care directive, lets you outline specific medical wishes if you are alive, but unable to communicate them for yourself. Specifically, you can state your wishes for artificial life support if you become terminally ill and will die shortly without artificial life support, or fall into an irreversible coma or persistent vegetative state. You can also specify your preferences for pain medication, artificial nutrition and include any special instructions.
The Terry Shaivo case illustrates what can happen to a young person with no plan for health care in place. The legal battle between her husband, family and state of Florida lasted for years before the court allowed her to be taken off life support in accordance with what her husband said would have been her wishes.
Health Care Power of Attorney
With this type of power of attorney, you can grant someone else the power to make health decisions on your behalf. The attorney-in-fact could be allowed to make very serious decisions during important and often emotional circumstances, based upon any instructions that you provide, including those involving life support and other end-of-life scenarios, such as consideration of treatment.
Should the unthinkable ever happen in your son or daughter’s life, a health care power of attorney, sometimes referred to as a health proxy, can ensure that you’re not only able to get all necessary information about your child’s health, but also to make decisions if he or she is unable to do so.
In some cases, a living will is combined with a health care power of attorney.
Both a living will and health care power of attorney are revocable—in other words, you can cancel either one at any time by destroying it, communicating you’re cancelling it to your physician, indicating in writing that it’s been cancelled, or by creating a new living will and health care power of attorney that indicates the new one revokes all prior ones.
Start the Conversation
Every family’s legal needs are different, but perhaps the most important step is starting the discussion. Talk to your family about scenarios that may apply to your lives and explore ways to be better prepared.
It’s important to know that processes and laws for powers of attorney vary by state, so be sure to research your specific situation in your area.
By creating a solid foundation for your estate planning, from a last will to a living trust, future additions or changes to your family’s circumstances won’t feel as daunting when the time comes. After all, life never slows down.