Why Young Adults Need Estate Plan Documents
No one under 30 thinks they need an estate plan, but they are wrong. Anyone over the age of 18 is a legal adult, and—as such—the individual’s parents have no legal rights if the young adult becomes ill or incapacitated. Investment News’ article, “The most important part of a young person's estate plan,” explains that legal documents typically associated with older or wealthier people can provide a solution.
One of the most important is establishing a medical power of attorney. Every adult who’s over 18 years old should have one. When a child is younger than 18, parents and guardians are able to make medical decisions for them. However, becoming an adult severs those parental and guardianship rights.
If there would be a medical emergency where a young adult is incapacitated and unable to make a decision regarding treatment, parents may have trouble accessing medical records or making health care decisions without a durable power of attorney for health care. Without a power of attorney, a judge may decide who the agent is.
Recently, Anton Yelchin, a 27-year-old actor in the new “Star Trek” films, died without a will. His parents needed to petition the Los Angeles Superior Court to be administrators of their son's $1.4 million estate.
At minimum, young adults should have a power of attorney for health care and a POA for financial assets. The financial POA says who can access financial accounts—like a 401(k) and an IRA.
Signing a POA lets a trusted person have a voice ahead of time. Also, a will is critical when a person becomes a parent. If both parents died, a court would have to determine a legal guardian for a child who is a minor. This is far too important to leave up to chance.
Parents of any age, even if they are young and have little or no assets, need a will to protect their minor children. An experienced estate planning attorney will be able to prepare the necessary documents.
Reference: Investment News (August 3, 2016) “The most important part of a young person's estate plan”