Estate planning for young adults might strike some as unnecessary, but that is far from the truth.
Estate Planning for Young Adults is Critical
Although it may surprise some people, once a child turns 18 their parents lose the legal ability to make decisions for their child and find out basic information. A parent learning that he or she cannot see their college student’s grades without their permission can be mildly frustrating to say the least. But a medical emergency can take this frustration to a completely different level. While many people only think of estate planning as something parents with young children or older adults need, the fact is that everyone over the age of 18 should have an estate plan. In the event there was a medical emergency concerning a young adult, the parents (or a sibling or another person like a girlfriend, best friend, fiancee, etc.) will almost always have to go to court to be given permission to obtain information about the student’s medical condition, be able to make decisions about the student’s treatment, and have access to the student’s financial records and accounts.
The following legal documents allow anyone, including a young adult, to name another person to make their medical and financial decisions if they are unable to make them on their own. The person(s) selected should be someone the young adult knows and trusts, and a candid discussion should occur now so that the person(s) selected know what the young adult’s wishes would be. These documents are not expensive and everyone over the age of 18 should have them.
Parents may want to set an appointment with their attorney after each child’s 18th birthday and encourage other parents to do the same for their young adults. We’ve even met some parents who are so proactive that they will pay for a young adult’s estate plan just so they can be sure they have one! Having these documents in place does not mean anyone expects to use them, but everyone will be glad to have them should they be needed.
In the Event of a Young Adult’s Incapacity
* A Heath Care Power of Attorney gives another person legal authority to make health care decisions (including life and death decisions) if someone is unable to make them for him or herself. In addition, a HIPAA Authorization give a person’s doctors permission to discuss your medical situation with others, including family members and other loved ones. Along with a Health Care Power of Attorney and HIPAA Authorization, every person should have a Living Will that specifies end of life medical wishes in the event they were faced with a terminal situation from which there was no hope of recovery. These three documents together are called Health Care Directives. They can be purchased as a package or as part of a comprehensive estate plan.
* A Durable Financial Power of Attorney gives another person legal authority to manage another person’s assets without court interference. An experienced estate planning attorney can write it in such a way that it does not go into effect until a person become incapacitated, unless the person making the power of attorney wants it to go into effect immediately. A Durable Power of Attorney can be purchased as an individual document, or as part of a comprehensive estate plan.
In the Event of Death
Since most young adults do not have substantial assets, a simple Last Will and Testament is probably all that is needed at this time. This will let the young adult designate who should receive his/her assets and belongings in the event of death. Otherwise, the laws of the state in which the young adult lives will determine this, and that may not be what anyone would want. In Arizona, many people might be surprised about how these laws work.
After the Documents Have Been Signed
A little housecleaning will probably be in order. It is important that the designated person under each document knows where to find health care records and providers, financial records and passwords if needed. The young adult should consider making a list of accounts and passwords, print the list and put it in a safe place. A hard copy is important in case the computer is lost or stolen, or in case the young adult has the computer password protected. If an online back-up system is used, be sure to include that information. Don’t forget to include passwords to online accounts (email, online banking, etc. and social media. If there is anything the young adult does not want someone (think, parents) to see, either get rid of it now or ask a friend to delete files or remove things if something happens. Finally, the young adult should update these documents as life changes, especially when the young adult gets married or has children.
A simple estate plan does not have to be an expensive or difficult process. At Neal Law Firm, we can prepare a basic will-based estate plan that includes all of the documents listed above. Call Arizona estate planning attorney Abigail Neal at (480) 699-7992 to get started today.