Estate Planning Documents for Young Adults
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Some individuals wait for major life events to start an estate plan. However, planning for life’s uncertainties is might be crucial as soon as a person reaches the age of 18. For minors, important medical and financial decisions fall under the authority of a parent or guardian. Once the individual reaches the age of majority, a parent no longer has legal power over these matters if their child becomes incapacitated. Even if the individual marries, a spouse’s powers are limited in the absence of a valid POA conferring authority upon the spouse to make financial and healthcare decisions if the individual becomes incapacitated.
Most young adults who graduate high school have either recently reached or will be soon turn 18. Our North Carolina estate planning attorneys have previously discussed the importance of implementing an estate plan prior to starting college.
Many legal responsibilities and freedoms are afforded to United States citizens when they reach the age of 18. Who will provide reliable care and maintenance of a young adult’s affairs if they are incapacitated?
Powers of attorney (POA) allow an individual (principal) to grant authority to a trusted person (agent). Advance directives, or health care powers of attorney, can ensure another party will oversee the principal’s healthcare. In the event of incapacitation, the absence of a POA would prompt court appointment of a guardian to make these decisions. A health care POA can help to avoid the necessity of a guardianship proceeding while allowing the agent to immediately access medical records and make healthcare decisions. Otherwise, the time-intensive process of appointing a guardian could prohibit important medical treatments from proceeding at the right time.
A durable POA offers an individual power over financial and legal matters on behalf of the principal. If the young adult’s insurance premiums, student loans, and other finances need to be managed during incapacitation, a POA can help to prevent insurance lapses, avoid late fees on debts, and ensure sensible management of money matters. For young adults just starting to establish themselves in the world, having proper paperwork and supervision ready in case of emergency can help to prevent financial problems that might seriously impact assets needed in the future.
The probability of an incident causing the need for an agent to take control might seem slim, but Forbes recently reported that accidents cause 250 million Americans aged 18-25 to be hospitalized each year. As with any legal planning, a comprehensive approach in advance can help to minimize problems and expenses at a later time. For young adults with a long future ahead, planning can’t start too soon.
By Attorney Samantha Reichle
