The sporting community and others around the country were stunned to hear about the untimely deaths of basketball great Kobe Bryant, his daughter Gianna, and seven others. Passing away is inevitable for everyone, but it is especially jarring when it happens to younger people. Nothing is certain, and these incidents remind us of this harsh reality.
As estate planning attorneys, we try to emphasize this point whenever we can. Far too many people think that estate planning is something that they can address in the future, but in all too many instances, surviving family members are left behind to deal with the consequences of inaction.
Estate Planning Essentials
It could be argued that estate planning is more important for younger adults than it is for their older counterparts. After all, the children of people that are in their 60s and 70s are typically going to be independent adults that can take care of themselves. The situation is entirely different for younger parents that have dependent children.
There is no cookie-cutter, one size fits all estate plan that is ideal for everyone, but there is a basic framework that is largely universal. First, you have to use a legal device to express your wishes regarding the distribution of your monetary assets.
Many people would assume that a last will is the solution, but in fact, a living trust is a far better choice for a wide range of individuals. We are not going to get into the details here, but we will cover them in a future blog post.
Life insurance is an important piece to the puzzle, and this is especially important if you have a family that is relying on your income. Term life insurance is a relatively affordable option that can provide you with peace of mind during certain periods of your life.
If you have dependent children, it is important to express your wishes with regard to a guardian that would care for the children if the unthinkable was to take place.
Every estate plan should also address the possibility of incapacity. This is something that strikes a significant percentage of elders, but younger people that suffer from catastrophic medical conditions can also become unable to communicate sound decisions.
We touched upon the fact that a living trust can be preferable to a last will, and one of the benefits is the ability to plan for possible incapacity. When you establish a living trust, you would act as the trustee while you are alive and well. In the document, you could name a disability trustee to step in to administer the trust in the event of your incapacitation.
Advance directives for health care will also be part of a comprehensive incapacity plan. You should include a Living Will to state your preferences regarding the use of artificial hydration and nutrition, resuscitation, and other life-sustaining measures. This is a personal decision, and it is one that you should make for yourself in advance.
Another related document that should be included is a Health Care Proxy. The “durable” designation is key, because a power of attorney that is not durable would no longer be in effect if you were to become incapacitated.
As the name would indicate, you use this device to name someone to make medical decisions on your behalf (decisions that are not related to the use life-support measures).
The Health Insurance Portability and Accountability Act (HIPAA) was enacted to protect your privacy when it comes to your health care records. Because of this law, you should include a HIPAA release form to give your agent (and anyone else that you choose) the ability to access your medical information.
Download Our Estate Planning Worksheet
We have provided some basic information here, and as you can see, you are putting your family at risk if you do not have an estate plan in place. If you would like to learn more about the process, we have an ideal resource that you can access right now.
Our attorneys have prepared a very useful estate planning worksheet, and if you take the time to go through it, you will be glad that you did. This tool is being offered free of charge right now, and you can click the following link to gain access your copy: Free Estate Planning Worksheet.