There are two big misconceptions when it comes to estate planning: (1) Only the rich need to worry about estate planning; and (2) Only people with kids need to worry about estate planning. When it comes to estate planning, young adults with minimal assets and no children are all too often overlooked. Unfortunately, failure to get the essential documents done can wreak havoc for any individual and his/her family in case of incapacity or death. A 19-year old college student may still be treated as a child within the family, but legally speaking he is an adult. If the student ends up in a coma, Mom and Dad will have a difficult time getting medical information and being able to make treatment decisions. Mom and Dad may need to spend time and money on a pricey legal proceeding to gain guardianship over their incapacitated child. A 25-year old working adult can face financial ruin if she is in an accident and no one is able to step in and handle her financial matters. An expensive conservatorship proceeding may be required.
At the very least, every adult should take care of the following:
- Health Care Directive – This document is necessary when you are not able to make medical decisions for yourself. You can appoint someone else to make decisions for you and/or leave instructions on what medical treatment you would (or would not) want. Having a health care directive can avoid the need for a guardianship proceeding.
- Power of Attorney – This document can appoint an individual to handle financial decisions during your incapacity. Accounts can be accessed and bills can be paid, and the time and expense of a conservatorship proceeding can be avoided.
- Beneficiary Designations – For young adults, a Will may not be necessary (if there are no children, limited assets, and a desire for probate assets to pass through the laws of intestacy). But everyone should utilize beneficiary designations for bank accounts, retirement accounts, and other investments.
I strongly believe that every adult should take care of these basics. I offer a “Just the Essentials” package for individuals looking to put together a Health Care Directive, Power of Attorney, and update their beneficiary designations. I also include a Health Care Directive and Power of Attorney for the dependent adult children of my clients in all other estate planning packages. To make sure you, or your adult children, are covered, contact me for more information.