I was visiting my grandmother in her nursing home, and I had an epiphany as I watched the residents have their lunch. Most of the residents could not walk without a wheelchair or walker. Some could not feed themselves. Some – like my grandmother – were a choking hazard and had to have their meat chopped up in a blender. As I watched them, I realized: not a single one of them thought or planned for this to be how they would spend the end of their lives. No one asked for this, and no one believed it would ever happen to them. And yet, it HAD happened – to all of them. I realized there was no difference between them and me, and I saw in that moment that my internal sentence of “But it won’t happen to ME” was nothing but hubris.
Maybe it won’t happen to me, and maybe it won’t happen to you. But it might, so it’s smart to prepare for what might happen in the future just in case.
Even if you concede that it MIGHT happen to you – and that’s a very big “might,” why give this a thought when you are still relatively young? I mean, I’m a millennial. I have grandparents and minor kids. I don’t need an Estate Plan, right? Why not wait until I’m old?
There are five very good reasons to do it now, while you are still building your life and career.
Reason #1: Be Prepared, Just in Case
The first question is not where to start, because the beginning is always a good place. The first question is when to start.
No one thinks they will be the victim of a terrible event, like a car accident, terminal illness or one of the other myriad ways we escape this mortal frame. But it’s not at all uncommon for accidents or illnesses to happen to young adults. Aside from being careful, you cannot plan for an unforeseen event. But what you CAN plan for is how you and your estate will be handled if you cannot handle your affairs yourself.
Just thinking about a plan is not enough. You must take action to implement your plan.
When you bought a home, you bought home insurance just in case of flood, fire or earthquake. When you bought or leased a car, you bought car insurance just in case of an accident. In planning for your family’s financial future, you may have purchased a life insurance policy so that your family will have financial security just in case you die young and have not had the time to build the financial nest egg your family will need to survive. We do all this not because we expect anything to happen now, but because we want to be prepared just in case.
Even though you may be young and healthy, it makes sense for you as a young adult to create your own Estate Plan now. A responsible adult (of any age) lives fully in the present, but plans for the future.
Reason #2: Decide Who Gets your Assets and Takes Care of Your Children
One very important reason to create an Estate Plan while you are still young and vibrant is that you want to protect and preserve what is most dear to you, starting with your children. Even if you don’t have biological children, you may have stepchildren, foster children, nieces, nephews or friends that you would like to inherit your money and your property once you pass.
And here you have a choice. You can either create an Estate Plan now while you are alive that protects, preserves and directs where your assets go, or you can ignore the topic and let the state decide who gets your money. Let’s say you have a spouse and minor children and no Will. Likely your spouse will get your money, and that might be what you want. But what if you and your spouse both perish? Your money may still go to your children under the laws of intestacy. OK. But who will take care of the money and who will raise your children as their guardian? If you don’t nominate someone in your Will, the court will decide.
It’s highly likely that, if asked, you have a strong preference as to who will raise your children if you can’t. But if this preference is not spelled out in writing in a document accepted by the court (that means a Will), your children’s guardian may end up being a family member you would not choose. Don’t leave it up to the court to determine who will be in charge of your children. Put your choice as to their guardian in your Will.
Reason #3: Can Your Minor Children Inherit Money?
The answer is “yes and no.” You can leave an inheritance for your children when you pass, certainly. But your 6-year-old cannot directly receive $300,000 from your Estate. (They might blow it all on bubble gum.)
Money for your minor children must be held in Trust with a Trustee who will manage the money. If you have not created an Estate Plan, the Trustee will be appointed by the court and could be someone you don’t want to be in charge of your children’s inheritance. Make sure your Will creates a Trust for your children and names not only their guardian, but the Trustee you desire to manage your children’s money.
Reason #4: Directing in Advance How Long You Will Stay
One of the most important Estate Planning documents you will want to sign is called an “Advance Directive,” more commonly referred to as a Health Care Directive or Living Will. If you ever end up on life support due to an accident or illness, this document tells your physicians what heroic measures, if any, you want or don’t want at end-of-life. As a younger adult, it may fall to your spouse, parents or siblings to make the decision to cease the heroic measures that are keeping your body alive. It is not a decision ANYONE should be asked to make without your clear guidance, so putting your preferences in writing is important for clarity and helps alleviate any guilt your decision maker may experience when they need to make sure your wishes are honored.
Reason #5: Giving Someone Legal Rights to You
Many millennials are waiting longer to marry. Advanced education and building a career are two common reasons to postpone finding a life partner and marrying. And even though “gay marriage” is constitutionally legal in America, many in the LGBTQIA community choose to remain single. For them, the people who have a legal right to a say in what happens with them if they become incapacitated are their biological family. They may have been partnered for decades, but that non-married partner has no legal rights, at least not when it comes to being your voice when you can’t speak for yourself. Any medical decisions that must be made for the unconscious single patient – even life and death ones – generally are made by the biological family according to a hierarchy of who has legal rights to the single patient encoded in the state law.
Meaning, the non-married partner has no legal rights and no say in their treatment or care.
That’s why it is critically important for all non-married adults (and especially non-married partners) to have a Durable Power of Attorney for Health Care and a Durable Power of Attorney for Finances. These documents legally empower the person of your choosing to speak for you and to make decisions regarding your care and finances should you become incapacitated. You want to give legal rights to the person you trust.
So the End is Not the End, but a Beginning
It simply is bad timing to prepare for the end at the end. It’s good timing to prepare for the end sooner than later, meaning toward the beginning of your adult life, your career, your marriage. You want a sensible yet comprehensive Estate Plan that specifies whom you want speaking and acting for you if you can’t, and who will raise your minor children and inherit your assets. “Be prepared” is not just a Boy Scout motto. It’s the most responsible way to live.