Estate Planning for Young Adults

As soon as an individual turns 18 they are an adult in the eyes of the law largely limiting a parent’s ability to step in and make important decisions.  As soon as an individual turns 18 it would also be wise to think about some basic estate planning in the event of something unforeseen like a car accident, ski accident, etc.

More likely than not, a young adult is not going to have enough assets to warrant the costs of a living trust or perhaps even a will. However, a young adult should have an advance health care directive and durable power of attorney for finances.

An advanced healthcare directive appoints an individual to make health care decisions for you. You can either appoint the individual to act immediately or upon your incapacity. This document will also express your wishes regarding being kept alive by machines and organ donation. A power of attorney appoints an agent to act for you regarding financial matters.

A power of attorney allows an individual to step into your shoes should you become unable to act. A power of attorney can be quite general or executed for a specific purpose, such as selling a piece of real property.

Both the advanced healthcare directive and power of attorney will allow a parent or loved one to make important decisions in the event of a young adult’s incapacity. If such planning steps are not taken then a parent will be forced to file for a conservatorship (adult guardianship) in the probate courts. Conservatorships are not ideal because they require extensive court supervision costing thousands of dollars.