How soon is too soon? When should your children drive, date, or go on their first spring turkey hunt? That is a common question parents must ask and answer when rearing their children to adulthood. So, when should your children have their own estate plan?
MarketWatch recently addressed this issue in an article titled “Why your kids need their own estate plan”
Few 18-year-olds have their own investments, retirement and insurance, let alone the complication of spouse and children. For many, however, it is just a matter of time in Overland Park and elsewhere. Why, then, should an 18-year-old newly-minted adult need a plan for their estate?
Once this birthday milestone is crossed, these “children” become “legal adults” with new legal rights and responsibilities. In fact, the basics of estate planning are as important for them as for their parents.
Consider a very common example of why young adults need a basic estate plan: healthcare matters. At age 17, if they can have an accident, then you (their parents and legal guardians) can step in to make their medical decisions, pay their bills, and even demand grade cards from their school. At age 18, however, all of that changes.
Should your adult child be incapacitated in a serious accident, then you are no more than a perfect stranger when it comes to your “legal” ability to take care of them and their business. You have hit a legal wall of expensive red tape. Fortunately, this wall is avoidable by prior planning.
And I do eat my own cooking when it comes to this.
When each of the Krull girls reached age 18, they executed "general durable powers of attorney" for financial decisions and "advance health directives" (i.e., "health care treatment directives," "durable powers of attorney for health care decisions" and "anatomical gift declarations"). Consequently, Gretchen and I have been able to help coordinate their medical and financial matters seamlessly, even though they are many hours away at college and grad school.
Bottom line: whether you are a newly-minted young adult, middle aged, or elderly, proper estate planning is a matter of personal responsibility. Basic estate planning tools include a health care proxy and a financial durable power of attorney.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
Reference: MarketWatch (August 6, 2013) “Why your kids need their own estate plan”