June 25, 2020
Estate Planning for Young Adults
Please read important disclosures HERE.
June 25, 2020
Please read important disclosures HERE.
At age eighteen, your children have reached an important milestone. They are now young adults in the eyes of the law and can take charge of their health care and finances and enter into legal contracts without a parent’s consent or assistance.
A young adult has a right to the privacy of their health information, which prevents others, including parents, from accessing their child’s information. So even if your young adult has a medical emergency, their doctor may have no responsibility to contact you and may even be legally prevented from doing so. One good way to stay informed and maintain your involvement in their health care decisions is to have your young adult sign a HIPAA Release. HIPAA, which stands for the Health Insurance Portability and Accountability Act, is a law that creates strict privacy protections for medical information.
By signing a HIPAA Release, the young adult gives their doctors permission to share health information with you. This allows your young adult’s doctors to alert you when he or she has a new medical condition. It also gives the doctors permission to share diagnoses and discuss options for their treatment.
For even more security, a young adult should also sign an Advance Health Care Directive. The Advance Health Care Directive could make you their health care decision-maker and obligate their doctors to inform you and consult with you about their health care.
Many young adults have begun to accumulate wealth from their careers and receipt of gifts or inheritances. Distributions may have been or should be made to them from irrevocable trusts that have terminated because of age requirements or custodial accounts distributed into their names.
Many young adults have not even thought about planning for incompetency or death. With simple planning, an individual’s intentions can be implemented and legal costs and complications minimized.
A durable general power of attorney will allow a person appointed by the young adult to act on their behalf, should they become incompetent or incapacitated. If it should become necessary to go to court to have a manager appointed, a nomination of conservator names the individual for the court to consider appointing to provide a manager for the financial affairs or the personal care of the young adult.
A will can be made so that in the event of a death, the individual’s wishes as to the disposition of their assets are followed. If the young adult has an estate of $166,250, creating a revocable trust should be discussed. Holding title of the financial assets in a revocable trust will (1) keep the assets separate from joint property acquired during marriage; and (2) avoid the initiation of a probate proceeding to transfer the assets in the event of a death. The terms of the will and trust can be amended as the individual’s circumstances (marriage or children) change.
Young adults use the internet and on-line storage for almost everything. Photos, social media accounts, shopping sites with stored credit card information, and bank accounts are all a part of one’s digital assets. Sharing where this information is stored or using a service that securely stores passwords will allow access to this information when needed. In addition, one may wish to name a digital executor, a tech savvy person who is responsible for managing digital assets if one dies or becomes incapacitated.
Even without a spouse or family, with planning and the execution of a set of legal documents, young adults can begin to build a foundation for their health and financial well-being.
This article provides a general overview of a particular estate planning topic and is not intended to be an exhaustive summary of every practical element of that topic. Many important elements of each subject are not discussed herein. This article is for informational purposes only and is not intended to be used as a general guide to estate planning or as a source of any specific recommendations, and it makes no implied or express recommendations concerning the manner in which any individual’s account should or would be handled, as appropriate estate planning strategies depend upon the individual’s specific objectives and circumstances. It is the responsibility of any person or persons in possession of this material to inform himself
or herself of and to seek appropriate advice regarding any investment, financial planning, or estate planning decisions, legal requirements, and taxation regulations which might be relevant to the topic of this white paper or the subscription, purchase, holding, exchange, redemption, or disposal of any investments.
Estate planning law changes frequently and the information presented within may no longer be current. Please do not rely on the information provided herein without first consulting an attorney.
This article does not constitute a solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful. Moreover, this article neither constitutes an offer to enter into an investment agreement with the recipient nor an invitation to respond by making an offer to enter into an investment agreement.
Opinions expressed are current opinions as of June 2020 and are subject to change. No part of this material may, without the prior written consent of Bingham, Osborn & Scarborough, LLC, be (i) copied, photocopied, or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient.