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Young Adults & Estate Planning: Getting Started
Parents of minor children often wonder what their young adults can do to prepare themselves for the future. Is it necessary for young adults in Oklahoma to get involved in estate planning? While creating an estate plan and thinking about the subsequent financial decisions may not seem like something that young adults should be concerned about given their age. Yet, if 2020 taught the world anything, estate planning for everyone is crucial to help family members avoid difficult times.
Estate planning documents help young adults plan for the future. As a whole, estate planning for young adults in Oklahoma isn’t only about avoiding probate. Creating an estate plan addresses many key concerns both young adults and their parents should understand and plan for. Some of the most important topics to discuss when creating an estate plan include life insurance, health care concerns and decisions, the various types of powers of attorney, and estate planning documents such as a revocable living trust. It is equally important to frame this discussion not on the end of life but on how creating a plan for the future can help your young adult be prepared should a difficult time arise.
Estate Planning: Young Adults & Life Insurance
When discussing creating an estate plan with young adults, life insurance is one of the easiest topics to address. Parents of minor children often have a life insurance policy in place. If you are interested in estate planning tools for the purpose of avoiding probate, life insurance proceeds are one of the easiest tools available for that purpose.
Additionally, life insurance proceeds can be used to plan for the future to fund a special type of trust known as a life insurance trust. A life insurance trust is an irrevocable trust.
It operates differently than a revocable living trust. The premiums for the life insurance policy must be paid for a life insurance trust to remain active. If the named insured dies, the beneficiary (the trust) receives the policy payout.
Life insurance is often less expensive for young adults as well. It is often a great idea to lock in a policy at a younger age and continue to make premium payments to help plan for the future.
Estate Planning: Young Adults & Health Care Concerns
Many young adults may not truly appreciate the idea of addressing potential health care concerns through estate planning. However, going to college or simply deciding to move out on their own to start their life is a big decision. The financial decisions that come with health care decisions both big and small can be overwhelming. Parents of minor children can all remember at one point when we didn't think anything could possibly happen to us. Creating an estate plan means thinking about how we can help our young adults address potential health care concerns.
One of the most common ways that health care concerns are addressed is by using estate planning documents known as powers of attorney. There are several types of powers of attorney, and there is a specific power of attorney that can be used for health care. One is durable and one is not. A durable power of attorney for health care continues to remain in effect even if your young adult becomes incapacitated.
Estate Planning: Young Adults & Estate Planning Documents
There are many documents that can be used in creating an estate plan. However, before selecting estate planning documents, it is important to have an end goal in mind. At such a young age, the end goal may not be avoiding probate. It may be starting the conversation about the importance of estate planning, financial decisions, and getting a plan together for the future.
One of the most common estate planning documents introduced and discussed is a revocable living trust. It helps family members avoid probate court for the assets that are placed in the trust. During the life of the person who creates the trust, it can be revoked or changed. It is a very flexible estate planning document.
Work With an Attorney
Creating an estate plan can often be overwhelming for both young adults and their parents. Whether your goal is to learn more information with your young adult or help them through the basic estate planning process, an estate planning attorney can answer your questions and help design the right estate plan for your young adult.
Ball Morse Lowe provides thoughtful, customized assistance for families seeking to start the estate planning process. Schedule your free consultation now!