Though it might seem like a plan for the distant future, estate planning is important crucial in the lives of young adults. Once someone reaches adulthood in the eyes of the state, parents do not have control anymore over their children’s finances and health care. If the child is unable to make an important financial or health related decision, the parents cannot step in and make sure the situation is handled the way they want it to be. These situations can range from being far away geographically (at college), or being in critical condition, or having other health problems. It is important to create an estate plan for your child as they become adults, and these are the steps to take in creating an estate plan:
Financial Power of Attorney and Health Care Power of Attorney
These powers are both critical as they allow someone to appoint a trusted person to make important decisions for them in the case that they themself are unable to. Both of these powers allow a parent to make final decisions for their child that relates to their finances or health if the child is unable to do so.
Financial Power of Attorney (POA) is specifically helpful in business or financial situations when your son or daughter cannot be present (e.g. renewal for a passport or car registration); this allows you to make decisions for ongoing legal situations on behalf of your children. This POA allows the parent to also have access to financial accounts for their children, such as 401(k) plans and other retirement accounts.
Health Care Power of Attorney is equally important, which allows a parent to access important legal information for their child and to make decisions.
These decisions can be in important and emotional situations, where the instructions that the child has left can be executed by the parent. Health Care Power of Attorney is also often connected with a living will, the next important element of a young adult’s estate plan.
A living will specifies what someone wants to be done in specific medical cases if they are still living. This includes directions regarding life support if one becomes ill and dependent on life support. One can also include preferences on receiving certain medications and any other special instructions. Many people have not created their living wills, resulting in many cases in which people who become terminally ill have families that are unable to make decisions for them without taking legal action. By making your living will, it facilitates their ability to take care of you if put in that situation.
A will is also important, even at a young age. Recently, 27-year-old actor Anton Yelchin (known for his role as Pavel Chekov in Star Trek) passed away without a will; this left his family having to go through extensive legal action to settle his $1.4 million estate. A will is also important in the case of having young children, as you can make sure that the guardian of your children does not become “...your boorish, derelict brother-in-law”, according to Charlie Douglas, a board member of the National Association of Estate Planners.
How to Begin
A good place to start is to just be thinking about these situations and developing a plan to obtain these documents. The processes and laws for POAs are different in each state, so it is important to make sure you have all the information for your specific location. Once you have prepared these documents, it will give yourself peace of mind, allowing your family to remain calm in difficult situations.
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