Estate planning important for young adults

June 22, 2013 (Press-News.org) Estate planning important for young adults

Article provided by Berman & Asbel, LLP
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When young adults turn 18 years old, they are most likely planning their futures with excitement. They are considering colleges or other post-secondary training, facing moving out of their parents' homes for the first time and looking forward to starting out on their own. Few people at that age are thinking about estate planning needs. Those who would stop to think about estate planning may think they have no need for it, since they do not have a lot of money or property. However, each person 18 years of age and older should have some basic estate planning elements in place in case of emergency.

Incapacity planning

No one likes thinking about the possibility of being in a position of needing medical care and not being able to make decisions about that care. However, it is wise to make a plan to have someone to make medical decisions in case of incapacity. Many think that if they are in an accident and cannot make their wishes known that their parents can just step in and handle it. What people do not realize, though, is that once they turn 18 years old parents no longer have access to their medical records due to the Privacy Rule included in the Health Insurance Portability and Accountability Act.

People should sign HIPAA authorizations allowing parents access to medical records, as well as drafting health care directives. The health care directive nominates an agent, and perhaps a back-up, to make health care decisions on the drafter's behalf and also has a living will. The living will spells out the drafter's wishes regarding the extent of medical intervention he or she wants to receive in the event that the drafter is incapacitated.

Power of attorney

Another important estate planning document that young people should prepare is a power of attorney. The power of attorney gives an agent that the drafter names the authority to act on the drafter's behalf in financial and other similar matters. A power of attorney allows another person to handle a person's financial affairs in the event that the person is unable to do so because of incapacity.

A power of attorney is useful not only in crisis situations. A student who is unable to come home to sign legal documents can name a parent as a power of attorney, allowing the parent to sign contracts or other documents on the student's behalf.

Distributing property

While students often do not have the same extent of property that more established people do, they may still want to consider drafting simple wills to ensure that the things they have go to the people they want to have them. If a person dies without a will, laws exists tol distribute his or her property. However, many people want to pass along possessions differently than how those laws would do it, and drafting a will can make sure that their wishes are followed.

If you have questions about estate planning, speak with a knowledgeable estate planning attorney who can help you create an estate plan that meets your needs.