More often than not, the first thing on a young adult’s mind is NOT estate planning. Whether you are 18 and heading off to college, or 30 and getting married, estate planning is something that should not be overlooked.
Typically, young adults believe they have insufficient assets that need to be protected or that they simply are too young to worry about dying. Those beliefs are mistaken. The reality is that you cannot predict the future. It may be a bit scary to consider as a young man or woman, but the chances of an unfortunate disability or even death is not so remote. The sooner you start planning, the more prepared you will be for what life has in store for you.
Regardless of your net worth, estate planning is a necessary process for everyone. If you want your loved ones to appropriately deal with your finances in case of emergency, a plan is crucial. For parents of college-aged children, it is important to note that in the event of something happening to your child while they are in school, you will not have any right to their medical records. Legally, without a living will or a health care directive that names a parent as agent authorized to act on behalf of their child, there will be no access to health records if your child is over 18 and therefore at the age of majority. Just as important, the parent needs a HIPAA authorization signed.
Durable power of attorney (DPA) is also another important estate planning aspect to consider for young adults. The DPA will allow the person of your choice to manage your finances and sign legal documents on your behalf if you are unavailable. The activation of a DPA is not necessarily because of tragic circumstances. Having your child sign a DPA naming a guardian as agent is helpful while the child is away at school or possibly studying abroad. Using the “studying abroad” theme while you discuss the circumstances with your child may soften the conversation.
Lastly, an important suggestion for young engaged couples: Do not be afraid to talk about prenuptial agreements just because you may not have an overabundance of assets at the present time. Although these types of agreements can be uncomfortable and sometimes even embarrassing to draft, they are nonetheless a great idea in the right situation. There are circumstances where considering a prenuptial agreement is extremely important. For example, if you expect a large future inheritance or if you have ownership in the family business, the prenup is essential.
If some of the points outlined above have piqued your interest and/or concern, schedule an estate planning consultation with an attorney who can answer your questions.
Image courtesy of freedigitalphotos.net by Stuart Miles
Joseph T. Zebrowski, Esq. is a passionate, community-involved professional and company liaison who is leading the development of the estate planning and wealth management division of LaBovick Law Group.