A common misperception is that estate planning is only for the old or the wealthy. Often, estate planning becomes urgent, something done quickly due to an upcoming trip or in response to a health scare. Estate planning, however, is important for every adult person. Indeed, the nature and extent of estate planning each individual needs depends on his or her age and stage in life. Estate planning is a short-hand term for planning for adult life. Beginning at the age a person become an adult in the eyes of the law, a person will benefit from estate planning.
In most states, a person is deemed an adult at age 18, able to vote, enter into contracts and make health care decisions for him or herself, to name a few adult privileges. Simultaneously, the parents of 18-year-olds can no longer have access to their medical records or make health care decisions for them. This is a wonderful new stage for the young adult. And the first stage in life that demands estate planning.
Every young adult should have a comprehensive Health Care Power of Attorney and Health Care Directive that does the following:
Once persons are age 18, gone are the days that their parents can call the doctor and otherwise handle medical issues. A Health Care Power of Attorney and Health Care Directive enables a young adult to transition to self-sufficiency. Young adults remain responsible for their health care decisions yet still may utilize their parents as consultants and rely on them for help as appropriate.
Many young adults also should have a General Durable Power of Attorney. This document designates another to act for the young adult in legal and financial matters. It is mainly used in the event of an accident or incapacity rendering the young adult unable to effectively manage legal and financial matters. (A “durable” power of attorney is one that continues to be effective even if the principal becomes incapacitated, which is generally when you would want the power to be effective.) Having such a document in place would avoid the necessity of having a guardian or conservator appointed should an accident or incapacity happen. A General Durable Power of Attorney is essential only when a young adult owns property in his or her individual name. Please note that “property” includes digital assets. (A full discussion regarding the unique issues surrounding digital assets is beyond the scope of this article but digital assets must be considered when determining if a young adult owns property in his or her individual name.)
The Health Care Power of Attorney and Health Care Directive and General Durable Power of Attorney are gifts for the young adult. These two estate planning tools will not only help protect a young adult but also serve as an introduction to financial literacy, an essential component of a successful and happy adult life.
Of course, powers of attorney are not just for college students. We recommend that everyone have up-to-date powers. If you have not updated yours lately, consider it. The persons you have named as agents may not be the ones you want to name now. Even if that has not changed, powers should be “refreshed” every so often. Older powers sometimes bring questions about their continued validity when you try to use them. We are happy to help you with this.
Katie Knapp advises families and helps them develop appropriate estate plans for their individual circumstances.
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