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Planning for Young Clients
PLANNING FOR YOUNG CLIENTS
A friend recently called me. He has two daughters in their 20’s. They recently got jobs, and they were in the process of applying for benefits. They were asked about whether they had a will, whether they had a power of attorney, and who should be called to handle medical emergencies. That got them thinking, and they turned to their dad for advice. That was nice.
It may seem strange that a 20-something single person needs to think about a will. At that age, dying is one the last things people think about, but it makes sense. With a will, you get to say where your property goes when you die. You can cover that with pay-on-death and transfer-on-death beneficiary designations, but those can be of limited value, and people miss things. So a basic will makes sense.
In addition to saying where things should go, you get to pick who is going to go through your stuff and administer your estate. Even a 20-year-old (or maybe particularly a 20-year-old) doesn’t want just anyone going through their stuff, even when they’re dead.
So even if you think you’ve done all of your planning, it is possible to have missed something, and will is a good safety net. If you don’t have kids, the will can be very simple, but if you have kids, you want to say who is going to be their guardians, and you probably want to avoid having the court administer their money sort of like in a Dicken’s novel.
In addition to a will, a young person certainly would want to have a durable power of attorney. Maybe it’s just my job, but I constantly run into situations fairly regularly where someone is in an accident or gets ill and can’t handle their business affairs. A durable power of attorney (and the word durable needs to be in it) allows someone to handle these things when you can’t.
And finally, a young person needs to have a medical directive of some sort. These do several things. First, they are a medical power of attorney that authorizes someone you name to make medical decisions whey you can’t. Second, they need to include HIPAA authority so that a doctor can talk to your family about your condition. I recently reviewed a medical directive that did not have HIPAA authority. Fortunately, we caught it before they needed to use it because, with that authority, doctors and hospitals won’t talk to anyone about anything.
The last thing that a medical directive should include is a living will. If someone is in a car accident, close to death, with no hope of improvement no matter what is done, do they want to be kept “alive” on machines or just allowed to die a natural death? It’s not a pleasant thing to think about, but it is so important when the time comes.
So when my friend called and asked what his daughters should do, I told them they needed to do some planning. It can make a lot of difference if the unthinkable happens.
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