Estate Planning for Young Adults
If you are a young adult, estate planning might be the last thing on your mind. However, because you are an adult, it is something you should take care of for yourself and for those who love you.
Do you need a Will? Probably not, unless you are married or have children. You may be surprised by that answer since a will is the first document most people associate with estate planning. Here’s why:
The estate of any resident of North Carolina who dies without a will (“intestate”) will be distributed in accordance with the state’s intestate laws. For someone who is unmarried without children, once any debts have been paid, the rest of their estate goes to their next of kin. That means your parents or, if they are not living, your siblings (both full and half-siblings).
If you are married without children, your estate would be divided between your spouse and your parents. If you have children and are not married, your estate would go to your children as soon as they turn eighteen. A court-appointed adult would hold it for them until then. Finally, if you are married with children, your estate will be divided between your spouse and your children.
If you want a different result from what is dictated by the intestate laws for your situation, you need a will.
You Need a General Power of Attorney. In a general power of attorney you give authority over your personal, financial and legal affairs to a person you select, called your Agent. This is an important document to have in case you are ever incapacitated by an accident or illness. Because you are an adult, no one (not even your parents or spouse) has an automatic right to access your solely owned bank account, for example, to pay your bills while you are in the hospital or to take care of other financial matters for you.
If you were injured without a general power of attorney in place and your incapacity lasts for more than a few weeks, someone will probably need to apply to the Court to be appointed as the “guardian of your estate.” That will give them authority to use your assets in your best interests. By having a general power of attorney in place before your injury, you can (1) control who will act as your Agent and what they can or cannot do and (2) save your loved ones the time, trouble and expense of pursuing guardianship through the court system.
You Need a Health Care Power of Attorney. In a health care power of attorney, you give authority over your medical and health care affairs to a person you select, called your health care agent. This document comes into play if you are ever injured or incapacitated in a way that prevents you from understanding or communicating medical decisions for yourself. Similar to your financial affairs discussed above, your parents will not automatically have the right to talk to your doctors concerning your medical condition or the authority to make medical decisions on your behalf.
You have probably heard of HIPAA, a federal law that closely guards the release of health information without prior authorization. There are also state laws to consider. Although North Carolina physicians can allow your parents to make medical decisions for you under our state law, many other states’ laws do not make that allowance. The law of the state in which you are hospitalized will control. Without a health care power of attorney in place, a loved one might need to apply to the Court to be appointed as “guardian of your person.”
By having a health care power of attorney naming specific adults as your health care agent and successor agents, you are saving your loved ones the time, trouble and expense of pursuing guardianship when they would rather be supporting you through recovery.
You Might Want an Advance Directive. An Advance Directive specifically concerns life-prolonging measures and is effective in the same situations as a health care power of attorney. It allows you to decide ahead of time what type of treatment you would want under certain circumstances. You can give your health care agent authority to override your directives, or you can require them to abide by your directives.
A word of caution: be very careful making an advance directive that your health care agent cannot override.
We can help you create an estate plan that fits your circumstances. If you are a young adult (or an older adult with a very simple situation), email or call us and ask about our simplified estate planning. For additional information about the parts of an estate plan, see our post on Fundamental Parts of an Estate Plan. To learn more about the roles of the agents and representatives mentioned above, take a look at our post on Fiduciaries’ Roles.
A thoughtful estate plan creates peace of mind.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.