When You Turn 18: It’s Time for Your First Estate Plan
Happy 18th Birthday! You have turned 18 and reached a major milestone in American life by becoming a legal adult. There are now many things you can do on your own such as entering into contracts, taking out a loan, and obtaining a credit card without a cosigner. You no longer have to worry about staying out late after curfew or obtaining parental permission before getting another body piercing or tattoo. In the vast majority of states, including California, you also can now get married without parental or court permission. You also now have certain civic responsibilities: registering to vote, jury duty, and registering with the Selective Service System within 30 days of turning 18 if you are male. But what about an estate plan? Aren’t those only for old people or people that have large estates? Why would someone turning 18 need an estate plan? Why is an estate plan the perfect birthday or graduation gift for an 18-year old?
As with any adult regardless of age, if you do not have a written legal document that designates who makes medical or personal care decisions for you if you become incapacitated, then someone will need to seek authority from a court to have a medical procedure approved or become designated as a conservator of the person. These court proceedings entail delay and may result in someone other than who you want making decisions for you. Because of federal and state privacy laws protecting health care information, health care providers will not be able to release information to parents once their child becomes an adult unless they have the child’s written authorization for release to them. While you may want your medical information restricted while you are competent and able to decide things for yourself, you most likely would want this information shared with someone close to you like your parents if there is a medical emergency making it impossible for you to share information about your condition on your own. For these reasons, Naimish & Lewis recommends that young adults have at least an Advance Health Care Directive in order to designate who will make medical decisions for them if incapacitated and allow access to medical information.
Another legal document for your first estate plan after turning 18 is a General Durable Power of Attorney. This document authorizes an attorney-in-fact to act on your behalf on financial and asset related transactions and usually only goes into effect if you become incapacitated. You want to make sure someone has the necessary authority to access your financial accounts to pay your bills on time. You also can designate someone as your attorney-in-fact under a Special Power of Attorney, which might be necessary to have someone designated to care for a pet while you are absent or make a sales transaction to purchase or sell a car. In California, the Uniform Statutory Form Power of Attorney may be sufficient for most young adults. Naimish & Lewis will assess the specific needs of each client and advise him or her accordingly on what type of document is the best fit for his or her situation.
The final document that you should consider having in your first estate plan is a simple Will. This avoids an intestacy situation in which California law rather than you determines your beneficiaries who receive ownership of your assets after you die. To avoid intestacy, you need a Will or an asset that can be transferred at death through a beneficiary or pay on death designation such as with a bank account. Through your Will, you also decide who is in charge of administering your estate. A Will not only covers monetary assets but also other assets you may have such as pets, motor vehicles, and digital assets, including social media accounts like Facebook and Twitter. You may want everything you own to go to your parents or you may not. If the latter, it’s definitely time for your first Will.
This blog only provides a general overview based on current California law. Each individual estate planning situation requires an independent analysis of the specific facts and circumstances involved. [Disclaimer] Our estate planning team at Naimish & Lewis can advise you on estate planning matters such as the creation of your first estate plan. To schedule an initial consultation with an attorney at our firm, please contact us.