Young people who are just striking out on their own have a lot on their minds and many challenges ahead of them. Whether they are heading off to college or starting a first job, independence can be both thrilling and daunting and can present a wide variety of questions that were not a concern in their high school years. However, while money and jobs and where to live can be top of mind for young adults, parents might want to consider having a less expected conversation with their burgeoning adult children about estate planning.
Why would an 18 or 19-year-old without any valuable assets need an estate plan?
The answer is that first and foremost, a young person will want to complete the non-economic elements of an estate plan, such as a power of attorney and a healthcare directive. This is particularly important for those who are not married since there will be no default delegate to handle their affairs in the event of an accident or illness.
This is because when a child turns 18, their privacy rights start to protect them from unsolicited interventions by their parents, which means that parents who are trying to get access to a bank account or medical records will have a hard time doing so without the proper paperwork. This can create a major problem in the event of an accident when an adult child may not be able to provide consent for doctors to release their medical information to a parent. This problem can be solved by filing out a health-care proxy form which grants access to information to a specific person or persons in the event of incapacity.
Source: Wall Street Journal, "Why Your College-Age Children Need an Estate Plan," Anne Tergesen, Sept. 21, 2013.