In 2020, only 16% of U.S. adults between ages 18-34 said they had a will or another type of estate planning document. The largest misconception about estates is that only the wealthy have them, but estate plans are not solely for rich individuals with a high number of assets. Everyone needs an estate plan to protect their assets, no matter how negligible you think they are.
During uncertain times, we have seen that anything can happen. Sometimes a health crisis or tragic situation is temporary — but it can quickly turn out to be much worse than you anticipated.
You may think that a will is enough to pass your belongings and property on to your family in the event of your death, but a will is only one part of an estate plan. Additionally, if you have not touched your will since it was first created, chances are that you need to update it.
Your estate plan should protect you and your loved ones in unexpected situations. It may include a wide range of documents.
A Will allows you to legally enforce your wishes concerning who will care for your minor children and who will receive your assets after you pass. After major life events, such as marriages, divorces, or family difficulties, you will likely want to update your will and ensure that you specify who exactly will receive your assets.
A Living Trust is a legal document that allows you to easily transfer assets within the trust to your beneficiaries when you pass away. The most significant benefit of a Living Trust is that it allows your family to avoid probate court, which is a lengthy and expensive process to distribute your assets after you pass. While you are alive, you can manage these assets for the benefit of your beneficiaries.
Advanced Directives allow you to dictate what happens in the event that you are incapacitated and cannot make decisions, such as if you are in a coma. They concern different Powers of Attorney you will need, including:
- Financial Power of Attorney
- Healthcare Power of Attorney
- Living Wills
- HIPAA authorizations
A Financial Power of Attorney will make financial decisions for you; a Healthcare Power of Attorney will make medical decisions for you.
A Living Will specifically states your end-of-life wishes. You get to dictate the circumstances under which you want healthcare providers to sustain your life or end all life-preserving measures.
HIPAA is a federal law that prevents healthcare providers from disclosing sensitive patient health information. If you have an adult child that is going to college, for instance, you no longer automatically have access to their health information if they experience an emergency. Without HIPAA authorization, you will legally not be able to receive information about a loved one’s condition.
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