Studies show that a very small percentage of younger adults have estate plans in place. On the one hand, this is understandable because of life expectancies. But on the other hand, people of all ages pass away every day, so you are taking a risk if you go through life without an estate plan.
One thing that is completely indefensible is a failure to put a plan in place when you have minor children depending on you for everything. Most families rely on two incomes, so you have to ask yourself where your loved ones would be if you were to pass away suddenly in an accident?
This question is even more profound if you are a single parent. Planning is a must if you are in this position, and life insurance can serve as an ideal source of income replacement. The cost should not be a concern, because term life is very affordable when you are relatively young.
Another very important thing to consider if you are the parent of dependent children is the matter of guardianship. It is rare, but sometimes both parents die at the same time. Once again, a single parent is in a very precarious situation on this level.
If you do nothing to prepare for this type of tragic circumstance, the court would appoint a guardian to take care of your children. This is a necessary safeguard, but you have no way of knowing if the designated guardian would be someone that you would have chosen yourself.
When you plan your estate effectively, you can proactively name a guardian that would be empowered to care for your children if it becomes necessary. When you take this step, you can go forward with the knowledge that there is a plan in place if something happens to you.
Incapacity Planning for Young Adults
A well-constructed estate plan will go beyond the financial element. Many people become unable to communicate toward the end of their lives. There are also those that recover, but for a period of time, they cannot speak with doctors.
When you are developing your estate plan as a parent, you should definitely execute the appropriate incapacity planning documents. With a living will, you can record your preferences regarding the use of feeding tubes, artificial hydration, resuscitation, mechanical respiration.
If you want to be an organ and/or tissue donor, you can let this be known in your living will. The document can also include your comfort care medication choices.
In addition to these life-support questions, other decision-making situations can arise. To account for this, your incapacity plan should include a durable power of attorney for health care. In this document, you name an agent that would make these decisions on your behalf if it becomes necessary.
The Health Insurance Portability and Accountability Act (HIPAA) was passed in 1996 to ensure patient privacy. There is a provision within this piece of legislation that prevents doctors from sharing medical information with anyone other than the patient. To allow your agent to speak freely with your doctors, you should include a HIPAA release.
You should consider the HIPAA implications as soon as your child reaches the age of 18. Their physicians would not be able to communicate with you unless the young person signs one of these release forms.
Action Is Required!
As you can see, estate planning is absolutely essential for the parents of young children. If you are currently unprepared, now is the time to take action.