Surveys consistently find that an overwhelming majority of young adults do not have any estate planning documents in place. The number is less than 25 percent for people that are between 18 and 54 years of age.
You may say this is completely logical because younger people rarely pass away. This may be true, but in a similar manner, very few houses burn to the ground. If you are a homeowner, do you carry fire insurance?
Protect Your Children
If you are the parent of minor children, estate planning is an absolute must. Even if you haven’t had the time to accumulate a lot of resources, there are some bases that you should definitely cover.
People pass away suddenly in accidents every day, and catastrophic illnesses can strike anyone. It’s a terrible thing to think about but sticking your head in the sand is not a very responsible response.
Who would take care of your children if you were no longer around? The answer is that it’s entirely up to you. You can do nothing and allow the state to decide on a Tutor if it becomes necessary, or you can name a preferred Tutor in your Testament or in a written document designed to fulfill that function. Louisiana has very complicated laws about management of the property and person of minor children. The person who has legal authority over the property of a minor is called a Tutor. Parents are the “natural tutors” of their minor children and a parent can designate someone who would become Tutor of their children in the event of death.
An estate plan for a parent with dependent children should also include an income replacement source. Life insurance is the ideal solution, and term life is quite affordable for people that are relatively young. You can upgrade your coverage as the financial needs of your family increase.
Individual retirement account beneficiary designations should be kept up to date at all times as well. If you take the right protective steps in advance, you can go forward with peace of mind.
A solid estate plan will include an incapacity planning component for financial matters and for health issues. The planning instruments commonly used in Louisiana for incapacity planning include health care mandates (often called Powers of Attorney), business mandates (another kind of Power of Attorney), trusts, and limited liability companies (LLCs). Business Mandates, trusts and LLCs can be used to designate someone to make financial decisions for you if you are unable to manage your own affairs. Heath Care Mandates can be used to designate someone to make health care decisions for you if you are unable to do so, including life ending decisions.
We believe having a comprehensive Health Care Power of Attorney (Note: the Louisiana Civil Code uses the term “mandate” for the instrument everybody else calls a “power of attorney”) is the best planning tool for health issues. However, Louisiana laws provides a document called an “Advance Directive” (sometimes called a “living will”) that is the bare minimum document anyone should have. One reason to have a Health Care Power of Attorney or, at minimum an Advance Directive, is because it is often gut wrenching for a loved one to determine whether to keep you on life-support or to take you off it. Having already made these decisions allows someone you designate to know your wishes with regard to when to remove you from life-support, and, as a result, they can become your advocate rather than an emotional, confused loved one. They can become your advocate to allow you to die with dignity.
As mentioned above, the planning tools for financial incapacity include a Financial Power of Attorney (or Mandate), trusts, or LLCs. These are all legal devices that can be used to designate someone to handle your financial affairs if it ever becomes necessary. There are other pages on this website that discuss these instruments in more detail.
Planning for Young Adults
You may understand why we recommend estate planning for parents of younger children, but you have to draw the line somewhere. Very young adults that are in their teens and early 20s certainly have time to wait, don’t they?
In fact, this is not true at all. The Health Insurance Portability and Accountability Act (HIPAA) prevents doctors from sharing medical information with anyone other than the patient. This applies to all adults, even people that are 18 years old, and the family relationship doesn’t matter.
Medical professionals would not be able to discuss your child’s medical condition with you once they are looked upon as adults in the eyes of the law.
To account for this, you should encourage your child to develop an incapacity plan that includes a HIPAA release form. Of course, this release is necessary for anyone that is putting an incapacity plan in place.
Take Action Today!
This type of planning means a lot to us, because a lack of preparedness can make a devastating situation that much worse. There is no reason to take any chances when affordable help is just a phone call away.