Urban Dictionary, the go-to source for deciphering slang used by anyone under the age of 30, defines “adulting” as “to do grown up things and hold responsibilities such as a 9-5 job, a mortgage/rent, a car payment, or anything else that makes one think of grown ups.” The younger generations are apparently using the term as a verb to brag on social media about surviving what the rest of us consider everyday life.
Yay for them for holding down a job and paying their bills on time, but most people who use this term are leaving one substantial adult to-do completely off their lists — estate planning. In an ideal world, people would be as excited about estate planning when they turn 18 as they are about playing the lotto or getting a tattoo. The reality is very few young adults take the time to craft even the most basic estate plan.
Why does an 18 year old need an estate plan?
Most people don’t think about estate planning until they have children or reach retirement age. This is a mistake. Everyone who is considered an adult in the eyes of the law should make an estate plan, if only to specify who gets to make healthcare decisions on their behalf should they become incapacitated.
If you or a young adult in your life needs convincing, consider what happened when Lamar Odom overdosed and nearly died at that brothel in Nevada. Khloe Kardashian was able to make medical decisions on his behalf even though they had signed divorce papers because their separation had not been finalized. If they had not been legally married, who would have made decisions on Odom’s behalf? Is estranged father? His kids? His kids’ mother?
Hopefully you and the young adults in your life are not making similar life choices to Odom, but he is a good example of a young person that would probably not be here if the person making healthcare decisions on his behalf had not stepped up and been decisive when he was in crisis.
What does a typical 18 year old’s estate plan look like?
There are three critical documents that any adult over the age of 18 should have:
A Will
Even though most young adults have very few assets, creating a will that leaves instructions on what to do with any assets one does have is a good idea. Perhaps more importantly for someone so young, a will is the document that names an estate administrator who will act on the deceased person’s behalf and carries out any last requests.
Medical Power of Attorney/Advance Directive with a HIPAA provision
This document is what healthcare providers will look for if a young adult becomes incapacitated. It appoints an “agent” or “agents” to make healthcare decisions on the document creator’s behalf, including end-of-life care decisions. It also gives the agent or agents some guidance on how the document creator would make other medical decisions if he or she cannot speak for his or herself. The document should also include a HIPAA release authorizing the agent or agents to access important health records.
Statutory Durable Power of Attorney
This document is similar to the Medical of Attorney in that it appoints an “agent” or “agents” to make decisions on behalf of the document creator. However, this document covers financial and legal matters. This document is what is used to access bank accounts, sign or break rental agreements, and withdraw from college classes.
These are the most commonly used estate planning documents no matter what your age, so it is no surprise they are the basic documents young adults need. Obviously more advanced planning documents may be necessary depending on one’s life circumstances. Talking with an experienced estate planning attorney can help you figure out what documents you need and get you set up to succeed at adulting.
To learn more about how our team can assist you with asset protection, schedule your strategy session here or give our office a call at (281) 324-8742.
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