Rampulla & Newstad LLP

In the hustle and bustle of our youthful years, contemplating estate planning may seem like a task meant for a far-off future. Yet, the importance of having crucial documents in place cannot be overstated, even for those under the age of 40. Particularly, health care directives and powers of attorney are not just for the older generation; they are essential tools for safeguarding our well-being and financial affairs, especially as we embark on new life chapters.

It’s Not Just for the Wealthy: One common misconception among younger individuals is that they don’t have enough assets to warrant estate planning. While it’s true that complex estates may necessitate more intricate plans, everyone, regardless of wealth, should have basic documents like a will, trust, health care directive, and power of attorney in place. These documents provide clarity and protection for your wishes, ensuring that your assets are distributed as you see fit and sparing your loved ones from unnecessary legal complexities.

The College Conundrum: As young adults head off to college, it’s natural for parents to assume that they retain access to their child’s health records and can make financial decisions on their behalf. However, this is not the case once a child turns 18. Health care directives and powers of attorney become indispensable tools in granting parents or trusted individuals the authority to make medical decisions and manage financial matters should the need arise. It’s a crucial step towards ensuring seamless communication and decision-making during unforeseen circumstances.

Beyond Joint Accounts: While joint accounts are often considered a convenient way to manage finances, they fall short when it comes to comprehensive protection. A power of attorney document goes beyond what joint accounts offer, by granting someone the authority to act on your behalf in a variety of financial and legal matters, even if you become incapacitated. This ensures that your financial affairs are managed according to your wishes, safeguarding your interests in a more robust way.

Plus, in most states, if a parent is joint on a child’s bank account, that money may all be considered the parent’s money for Medicaid or other needs-based benefit programs. This unintended consequence could result in harsh treatment when applying for such programs. Further, joint accounts typically use the “survivor wins” rule, wherein the living account owner takes all, which may hinder your post-death distribution plan.

In conclusion, health care directives, powers of attorney, and wills are not just for the aging demographic; it’s a crucial step for anyone who wishes to have control over their life decisions. By establishing health care directives and powers of attorney early on, we not only ensure our own well-being but also provide clarity and support for our loved ones during challenging times. It’s an investment in our future, giving us peace of mind and the ability to face life’s uncertainties with confidence.