All parents say that they would do anything to protect their children, and they are sincere when they make these statements. However, most of them have a very big blind spot when it comes to estate planning.
The vast majority of people that are under the age of 55 do not have estate plans in place, and this is a disturbing fact of life. Yes, people usually do not pass away before their time, but it does happen each and every day.
You are taking a big risk if you roll the dice without an estate plan, and you are gambling with the well-being of your family.
Minor Children Considerations
At the bare minimum, you should have a simple will and advance directives for health care in place when you have dependent children still in your home. You should carry enough life insurance to replace your income, and you should designate a guardian for your children.
A living will is one advance directive that should be part of your incapacity plan. This document is used to state your preference regarding the use of life-sustaining measures like resuscitation, mechanical respiration, and artificial nutrition and hydration.
The other directive that is highly recommended is a durable power of attorney for health care. In this device, you empower someone to make medical decisions on your behalf if you become unable to communicate them for yourself.
If you want to be very well prepared, a living trust would be a good choice. When you have this type of trust in place, the trustee would be able to manage assets that have been left for the children. This would include life insurance proceeds.
Young Adult Planning
Most parents of young children would not argue with the logic behind putting a plan in place, but you have to draw the line somewhere, right? A teenager that is 18 or 19 years old has plenty of time to wait, and they do not have significant resources to pass along to anyone.
This makes sense on the surface, but there is a very serious consideration that many people overlook.
The Health Insurance Accountability and Portability Act (HIPAA) was passed in 1996 to protect patient privacy. A provision contained within this legislative measure prevents doctors from sharing health care information with anyone other than the patient.
Let’s say that you have a daughter that is away at college, and she is 19 years old. As soon as she celebrated her 18th birthday, she was an adult in the eyes of the law. As a result, at that time, the HIPAA protections were extended to her.
If you get a phone call in the middle of the night from her roommate saying that she was in a serious accident and she has been hospitalized, you would call the facility. They would not be able to tell you anything about her condition because of the HIPAA restrictions.
For this reason, as soon as a child becomes a young adult, you should explain this situation to them. They can sign a HIPAA release giving you the ability to communicate freely with their doctors, and they can make you the agent in a durable power of attorney for health care.
Of course, this release should be included in all incapacity plans, regardless of the age of the individual in question.
Take Action Today!
Now is the time for action if you are going through life without an estate plan as the parent of dependent children or young adults.
We would be more than glad to gain an understanding of your family dynamic and your financial position and explain your options. After you make your final decisions, we can craft an estate plan that is tailor-made for you and your family.