The Most Important Part of a Young Person’s Estate Plan

There are some universal estate-planning strategies that apply to young people, no matter their financial situation.
 
The most important is establishing a medical power of attorney. Every adult at least 18 years old should create one.
 
Prior to age 18, a child’s parents and guardians are able to make medical decisions on their behalf, but becoming an adult severs those parental and guardianship rights. In the case of a medical emergency, in which a young person is incapacitated and unable to make a decision regarding treatment, parents will not be able to access medical records or make health care decisions without a medical power of attorney.
 
Creating a medical power of attorney does not have to be expensive. The private, nonprofit organization called Aging With Dignity offers online access to a document, called Five Wishes, that serves as an advance medical directive. It is meant for the elderly, but any adult can use it, and it is recognized in more than 40 states.
 
Young adults should also have a power of attorney that governs financial assets. The financial power of attorney determines who can access financial accounts, such as 401(k) plans and individual retirement accounts.
 
Reference: The most important part of a young person’s estate plan, Investment News, August 3, 2016.