As a parent, one of the most important things you can do for your young adult is to ensure their future is protected. While we often think of estate planning as something only for older adults, it’s crucial for parents of young adults to consider as well. Whether they’re heading off to college, starting their first job, or becoming more independent, having the right legal protections in place can provide peace of mind and support when it’s needed most.
Here are key estate planning steps to take to protect your young adult:
1. Create a Health Care Power of Attorney
When your child turns 18, they legally become an adult. As such, you no longer have the automatic right to make medical decisions for them. A Health Care Power of Attorney allows you to step in if they are ever unable to make decisions for themselves due to an illness or accident. This document ensures you can be their advocate in times of need.
2. Establish a Durable Power of Attorney for Financial Matters
A Durable Power of Attorney is a document that allows you to manage your young adult’s financial matters if they are incapacitated or unable to make decisions. This can be especially important if they’re living independently, managing their own finances, or going away to school. With this document, you can help them handle financial tasks like paying bills, managing bank accounts, or filing taxes if necessary.
3. Consider a Will or Trust
While it may seem premature, having a will in place is important for young adults. It allows them to designate who will inherit their assets and who will care for their pets, for example. If your child owns valuable assets, such as a car or personal property, having a will in place can help avoid confusion or delays in asset distribution in the event of an unexpected tragedy.
If they have more significant assets, setting up a trust might be an option to consider. A trust can allow your child’s estate to be distributed according to their wishes, all while avoiding the probate process.
4. Create a Digital Estate Plan
In today’s digital world, our online lives hold significant value. It’s important to consider your child’s digital footprint, including social media accounts, emails, and online banking. A digital estate plan ensures that someone can access and manage these accounts in the event your young adult is unable to.
5. Review Beneficiaries and Insurance Policies
As a parent, it’s essential to review and update your young adult’s beneficiary designations on insurance policies, retirement accounts, and bank accounts. Without up-to-date beneficiary designations, your child’s assets could be subject to lengthy probate processes or distributed contrary to their wishes.
6. Plan for Student Loans and Debt
If your young adult is navigating student loans or has other debts, it’s important to understand how these liabilities will be handled in the event of an emergency. Consider discussing options for consolidating loans, exploring student loan protections, or setting up an emergency fund for unexpected expenses.
Conclusion
Estate planning for young adults may not be top of mind for many parents, but it is a crucial step in ensuring your child’s financial, health, and digital security as they become independent. Taking these proactive steps now can help prevent potential complications in the future and provide you both with peace of mind.
If you need help navigating estate planning for your young adult, contact us today to learn more about how we can assist you in setting up the right protections.
