Young adults and the millennial children of older adults are not who you’d think of as needing estate planning advice. These people are most likely away at college or just starting their careers and probably have little in financial assets.
Investment News’ recent article, “The most important part of a young person's estate plan,” notes that, nonetheless, there are some universal estate planning strategies that work across the board, regardless of a person’s financial situation.
One of the most important is establishing a medical power of attorney. Every adult who’s over 18 years 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.
Younger adults and parents of younger adult children need to make sure they have at least the basics. And, if they have minor children, they need to at least have a will. A qualified attorney can help make sure all of this is done right.