While most 18-year-olds outside of Hollywood aren’t too concerned with estate taxes or asset protection, estate planning still can play a vital role in protecting the interests of young adults. The primary concerns for this group relate not to assets but to health care. For example, who is allowed to make health care decisions for the new adult? Who has access to their health information? What would happen in the unthinkable event of a situation requiring end-of-life decisions? These questions can be answered simply and elegantly by a basic estate plan.
The age of majority in Massachusetts is 18. While your 18-year old may not seem like an adult to you, this is the age at which they can make decisions for themselves concerning a wide range of issues, such as contracts, health care, and disposition of assets upon death. It also means that your ability to assist in the decision making process is severely limited. For these reasons, it is a good idea for every young adult to have their own estate plan, even if they do not have much in the way of assets.
A basic estate plan for a newly-minted adult should include the following documents:
Health Care Proxy. This is a document which designates who can make decisions for the young adult if they are unable to make decisions for themselves. Such a document will enable the power holder to make decisions quickly in an emergency, without having to go through the time consuming and expensive court process of becoming a guardian or conservator.
HIPAA Release. HIPPA is the federal health information privacy law, which restricts doctors from discussing a patient’s medical background with others. This document is necessary to allow doctors to speak openly with the Health Care Proxy (and/or other close family members) so that they can make informed decisions regarding the principal’s health care.
Power of Attorney. This document allows the agent to make decisions over the property and financial affairs of the newly-minted adult. The POA can be very convenient when the principal is away at school or travelling abroad, allowing the power-holder to sell their car, sublet their apartment or deal with their bank. Of course, if the principal is more concerned about independence than about these conveniences, the POA may be drafted as “springing,”, i.e., only effective upon the principal’s incapacity.
Living Will. A living will expresses the individual’s preferences regarding end-of-life decisions. Unfortunately, young adults can face these issues as well and having their desires in writing can ease the burden from loved ones while documents what care options should or should not be explored.
Of course, if the young adult has a child of their own, a will is necessary for them to nominate who would be guardian of that child in the event of their death. If the young adult has substantial property, a more robust estate plan may be in order.
Planning is the adult thing to do and makes life easier for everyone involved. Contact an estate planning attorney to discuss your loved one’s options regarding these important matters.