Many have the mistaken idea that estate planning is only for the rich or aging, which leads to many avoid or ignore estate planning for minor children and young adults. In fact, surveys consistently find that an overwhelming majority of young adults do not have any estate planning documents in place. A recent survey found that 41% of young adults ages 18 to 34 have not begun to plan.
You may say this is completely logical because younger people rarely pass away. This may be true, but in a similar manner, very few houses burn to the ground. If you are a homeowner, do you carry fire insurance? Estate planning for minor children and young adults is just as important.
Protect Your Minor Children
If you are the parent of minor children, estate planning is an absolute must. Even if you haven’t had the time to accumulate a lot of resources, there are some bases that you should definitely cover.
People pass away suddenly in accidents every day, and catastrophic illnesses can strike anyone. It’s a terrible thing to think about but sticking your head in the sand is not a very responsible response.
Who would take care of your children if you were no longer around? The answer is that it’s entirely up to you. You can do nothing and allow the state to decide on a guardian if it becomes necessary, or you can name a preferred guardian in your last will.
An estate plan for a parent with dependent children should also include an income replacement source. Life insurance is the ideal solution, and term life is quite affordable for people that are relatively young. You can upgrade your coverage as the financial needs of your family increase.
Individual retirement account beneficiary designations should be kept up to date at all times as well. If you take the right protective steps in advance, you can go forward with peace of mind.
A solid estate plan will include an incapacity planning component, and advance directives for health care are important pieces to this puzzle. A health care proxy allows you to designate someone to make all health care decisions for you if you are unable to do so, including life ending decisions. You name an agent to make medical decisions on your behalf in this document. New York State has chosen this document rather than the living will as the primary healthcare documents.
Another advance directive that we believe should be part of the plan is a living will in which you can state your choices regarding the utilization of feeding tubes, artificial hydration, mechanical ventilation, and resuscitation. We suggest this document because it is often gut wrenching for a loved one to determine whether to keep you on life-support or to take you off it. Having already made these decisions allows your healthcare proxy to know your wishes with regard to when to remove you from life-support, and, as a result, they can become your advocate rather than an emotional, confused loved one. They can become your advocate to allow you to die with dignity.
You can address each respective type of life support separately if you have different opinions about each respective procedure. Your living will can include your organ and tissue donation choices along with your comfort care medication preferences.
A durable power of attorney for property should be included to complete the plan. This is a legal device that is used to empower someone to handle your financial affairs if it ever becomes necessary. It is called durable because it survives your becoming incapacitated and can still be used.
Estate Planning for Young Adults
You may understand why we recommend estate planning for parents of younger children, but you have to draw the line somewhere. Very young adults that are in their teens and early 20s certainly have time to wait, don’t they?
In fact, this is not true at all. The Health Insurance Portability and Accountability Act (HIPAA) prevents doctors from sharing medical information with anyone other than the patient. This applies to all adults, even people that are 18 years old, and the family relationship doesn’t matter.
Medical professionals would not be able to discuss your child’s medical condition with you once they are looked upon as adults in the eyes of the law.
To account for this, you should encourage your child to develop an incapacity plan that includes a HIPAA release form. Of course, this release is necessary for anyone that is putting an incapacity plan in place.
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This type of planning means a lot to us, because a lack of preparedness can make a devastating situation that much worse. There is no reason to take any chances when affordable help is just a phone call away.