Many people view estate planning as a task reserved for older individuals with established lives and significant assets. After all, isn’t estate planning only for old rich people who have “estates”? This is a common misconception. The truth is that an “estate” is simply a compilation of your assets, of whatever size and complexity. Everyone over the age of 18 should look into completing an estate plan.
Estate planning is far more comprehensive than just drafting a will and determining how to distribute money. It consists of several essential documents, including Medical and Financial Powers of Attorney and Advanced Medical Directives. These essential documents are vital for individuals of all ages.
The Importance of Turning 18
Upon reaching the age of 18, an individual becomes solely responsible for their own medical and financial decisions and records. Often, parents will contact their adult child’s school only to be told the parent doesn’t have the authority to access their child’s school or medical records. Parents who have always taken care of their child’s medical and financial care have suddenly run up against a roadblock. It’s a common oversight for most parents, who once had access to important documents and the authority to make decisions for their children, who are unable to make medical and financial decisions for their child who has now turned 18.
In the unfortunate scenario where an adult child becomes incapacitated without an estate plan in place, their parents may find themselves legally unable to make essential financial or medical decisions on their behalf. This potential conflict can be smoothly avoided through the creation of Powers of Attorney and Advanced Medical Directives for your recently adult child. These documents allow an adult child to legally designate their parents (or other trusted individuals) as authorized parties to make financial and/or medical decisions if they are unable to communicate their own wishes.
Even your 18-year-old child has an “estate”. It may seem odd to think about this, but if your adult child owns a checking or savings account, then they have an “estate” that might need probate on their death. Probate can often be avoided, however, by the existence of beneficiary designations on their financial accounts. It’s important to speak to your adult children about the importance of beneficiary designations on banking and financial accounts and insurance policies.
At a minimum, your 18-plus child should have medical and financial powers of attorney and beneficiaries designated on all their financial accounts. As your adult child matures, they will need to revisit these essentials and expand upon them.
Low Income Doesn’t Mean Low Expectations
Similarly, even older individuals who may not have significant assets or clear inheritors should still establish an estate plan. If you think you don’t have a high enough net worth to justify the cost of an estate plan, think again. You’ve worked hard for what you have and if you care about who gets what, think about estate planning. If you pass away without a will, the State of Texas has laws that dictate who gets your hard-earned assets – and it might not be who you would have chosen. Estate planning puts you in the driver’s seat to ensure your loved ones inherit the things you’ve worked so hard to earn.
Beyond Assets: Autonomy and Protection
Think about who will assist you in making medical and financial decisions if you’re not able to. Estate planning is not solely about passing along items to your descendants after death; it is also a way to maintain your own financial and medical well-being when you are unable to communicate on your own. It is a critical way to ensure your autonomy is respected and your loved ones are empowered to act on your behalf when you need them most.
Marriage and Estate Planning
Many people have the misconception that because Texas is a community property state, the surviving spouse automatically gets everything. It is not always the case that the surviving spouse inherits everything and it’s never automatic.
As you can see, estate planning is for everyone. If you’d like to speak with one of our estate planning attorneys, we’d be happy to chat! Feel free to reach out to Heights Law Group for a complimentary consultation for your estate planning needs.
