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The most important reason is so obvious it should be self-evident to everyone. People of all ages are stricken by catastrophic illnesses every day, and auto accidents are common. In fact, younger drivers are more likely to be in crashes than older, more experienced drivers.
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If you have no resources and you don’t have anyone depending on you, the financial part of estate planning is not important at all. This being stated, you should still have a plan in place.
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Every estate plan should include an incapacity component. Would you want to be kept alive through the use of artificial measures if there was no hope of recovery? Do you think it would be fair to put that decision in the hands of your next of kin?
If you have ideas of your own, and just about everyone does, you can express them in a living will. This is one advance directive that should be part of the plan, and you should include a durable power of attorney for health care.
You use the power of attorney to name someone to make medical decisions on your behalf if it ever becomes necessary. To give the agent the ability to speak freely with your doctors, you would include a HIPAA release.
This acronym stands for the Health Insurance Portability and Accountability Act. It was passed in 1996 to protect patient privacy. Doctors are not allowed to share medical information with anyone other than the patient unless a release form has been signed.
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The exact makeup of the plan would depend on your financial situation and your overall intentions. First, you should make sure that you are carrying sufficient life insurance. Term life is affordable for people that are still young, so this is the right choice for most young parents.
One way to proceed would be to establish a joint revocable living trust with your spouse. You could act as co-trustees while you are both living, and you would both have complete access to all assets that you put into the trust.
In a real sense, there would be no difference with regard to the day-to-day utilization of your funds and your property. You could also put the life insurance policies in the trust.
If one parent passes away, the other parent would become the sole trustee. To account for the possibility of dying simultaneously, you would name a successor trustee.
Your estate plan should also include the choice of a guardian to care for your children if it becomes necessary. The guardian can be the same person that would act as the trustee, but this is not required.
This is one way to go about it, but the ideal way to proceed will depend upon the circumstances.
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You may be surprised to hear that parents should encourage their young adult children to put some estate planning documents in place when they are just 18 years of age.
The HIPAA protections kick in as soon as a person reaches adulthood in the eyes of the law. Medical professionals would not be able to talk to a parent about their child’s medical condition, even if they are out-of-state.
To account for this, a child should sign a durable power of attorney making their parents the agents along with a HIPAA release.
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Take Action Today!
We are here to help if you are ready to put an estate plan in place. You can schedule a consultation in Essex Junction, Vermont if you call us at 802-879-7133. The number in Albany, New York is 518-389-6020, and you can send us a message if you would rather reach out through the Internet.
