5 minute read

Myth Busters Part 4: Why You Need an Estate Plan Even if You’re Young and Healthy

We’re breaking down another common estate planning myth! Find out why you need an Estate Plan– even if you’re young and healthy.

Patrick Hicks

Patrick Hicks, @PatrickHicks

Head of Legal, Trust & Will

“I’m young and healthy..I don’t need to be worried about estate planning!”

Many Americans understand that estate planning is an important activity, yet they often don’t think that it applies to them. We’re here to talk about why young adults, even those who are perfectly healthy, still need an Estate Plan. Keep reading to find out how an Advance Directive & Health Care Estate Plan can protect you, no matter your age or health status.

[In honor of Financial Literacy Month, we are hosting an Instagram Live "Ask Me Anything" with our very own General Counsel, Patrick Hicks, and expert CFA/CFP, Tara Falcone! Join us on April 29th! Have something you want answered? Comment your question on any of our recent Instagram posts.]

Myth: Estate Planning is Only for the Old or Wealthy

Let’s take a moment to unpack the reasons why estate planning is often misconstrued as something that only benefits the wealthy or the elderly.

Legal and financial literacy topics aren’t taught in our school systems. Seldom does the average person have extensive knowledge about estate planning and its possible benefits. That is, unless they conducted research or had a family member explain it to them (and correctly at that.)

This means that what the average American knows about estate planning is consumed through popular media. Television shows and movies tend to highlight one aspect of estate planning, which is the distribution of assets. Further, portrayals often center around themes of wealthy inheritances and trust funds. 

Determining what happens to your assets when you pass away certainly is an important part of estate planning. Even if you are not wealthy, you still have valuable assets and property such as a 401(k) or sentimental items that deserve to be accounted for.

However, in reality, estate planning covers so much more than just asset distribution. 

Let’s use a few questions to help illustrate:

  • Who will take care of your pet or children if you were to pass away tomorrow?

  • Who could make sure your bills are paid on time if you’re on vacation and get stranded in a foreign country?

  • Who would make decisions about your medical care if you get into an accident and are in a coma? Would they know what treatments you would refuse? 

  • Would anyone know how to access your cryptocurrency if you were to suddenly pass away?

What do these questions have in common? These are all situations that can affect anyone, regardless of their age. They are also all scenarios that can strike at any time. 

They are all issues that can be addressed and solved in advance by using an Estate Plan.

Not only should young people establish an Estate Plan if they don’t already have one, they should get prepared as soon as possible.

Advance Directive & Health Care Documents

An Estate Plan is a collection of legal documents that can evolve as you age and your life circumstances change. If you’re young, addressing your healthcare concerns and final wishes is a great place to start.

Here are examples of the types of documents you’d want to include in your Estate Plan:

  • Advance Health Care Directive (Living Will)

  • HIPAA Authorization

  • Power of Attorney

  • Last Will & Testament

Advance Health Care Directive 

A Living Will and Medical Power of Attorney together form an Advance Directive. These are documents that you can personally use to plan for your future medical care. If you were to become incapacitated, then your doctor and Power of Attorney (POA) can refer to your Living Will to understand what kind of medical care you’d like to receive in various scenarios, including any treatments you would want to use. Your Living Will can cover decisions such as organ donation wishes, comfort care, and Do Not Resuscitate (DNR) orders. You can read more about the Living Will and Advance Directive here

The Medical Power of Attorney is a document that authorizes an agent to make decisions on your behalf, specifically in the scope of medical circumstances. If you were to become incapacitated (coma, mental health emergency, lose the ability to speak), then they can make those difficult and urgent decisions in your best interest. Learn more about Medical POA here

Power of Attorney

Separate from your Medical Power of Attorney document is your general Power of Attorney document. If you were to become incapacitated, or stranded in a foreign country, who would be able to step in and take care of your general affairs? 

Your general Power of Attorney (POA) document enables you to authorize an agent to step in and make financial, business, and personal decisions on your behalf. They can do things like pay your bills, run your business, and buy insurance policies on your behalf.  

If you are in the hospital for a long time, you wouldn’t need to worry about your personal and business affairs coming to a stand still. This can provide great peace of mind knowing that someone will have your back and make sure your affairs remain a well-oiled machine during your absence.

If you were to become physically or mentally incapacitated, having a POA can be powerful and effective. However, this is a significant responsibility so be sure to choose someone you can trust. Learn more about selecting a POA here

HIPAA Authorization

The Clinton administration signed the Health Insurance Portability and Accountability Act into law in 1996. This act improved how personal information carried by healthcare and insurance entities would be protected from fraud and theft. It prevents healthcare providers and businesses from disclosing private information without the express consent of the patient and other authorized representatives. 

By signing a HIPAA authorization, you are authorizing the release of your medical records and information to designated agents. Your authorization works together with your Living Will and Power of Attorney documents such that your agents and healthcare providers have all the information they need to make the best decisions possible on your behalf.

Last Will & Testament

Last but not least - the Last Will & Testament. A Will should be included in any Estate Plan, regardless of your personal circumstances and estate planning goals.

A Will is the document that states how your assets and property should be distributed after you pass away. As mentioned earlier, this doesn’t have to be synonymous with wealth. Absolutely anyone has something of value to pass one to a loved one. This can include sentimental items, clothing, maybe a retirement savings account. In the absence of a Will, the probate court will be forced to distribute your property using intestacy laws. If you have a preference for who should inherit a certain belonging or asset, be sure to write it down in your Will.

Further, a Will serves the important purposes of appointing a guardian and leaving instructions for your final arrangements. If you have children, you can appoint a trusted adult to look after them in case anything were to happen to you. Further, you can arrange funds to be used for their care. Don’t have kids? Don’t forget that you may still want to nominate someone to look after your pet (and your plants.)

Finally, your Will is your space to leave instructions about your final arrangements. Death is not something we often talk about with friends and family, if ever. This is your opportunity to leave your wishes in writing. This includes whether or not you’d want a funeral, how you would like for your remains to be handled, and any special instructions for your memorial or celebration of life. 

Click here to learn more about the power and diversity of the Will.

Create Your Estate Plan with Trust & Will Today!

After reading this guide, you hopefully now have an understanding that an Estate Plan is a powerful way to protect yourself and have your voice heard. There are many aspects of estate planning that benefit the young and healthy, and not just the wealthy or elderly. 

However, there are two more points that can cause anyone to procrastinate: the expense and the complexity. Estate planning admittedly gets a bad rap as a dreary and convoluted process. The common notion is that you have to hire an expensive attorney and go through mountains of paperwork and legal jargon to set up your Estate Plan. No wonder anyone would keep putting it off.

Did you know that there have been major changes to the estate planning industry? Trust & Will disrupted this narrative by developing a service that makes estate planning easy and accessible to anyone! You can get it done all online, and your documents are mailed to your door. You wouldn’t have to leave the comfort of your home if you didn’t want to. We make it easy by providing quizzes and simple questions to help you build your Estate Plan, step-by-step. We also have agents providing support any time of the day, every day of the year.

Last but not least, all of the documents we talked about today can be executed for the low cost of $199. Our Health Care Documents product includes your HIPAA Authorization, Living Will, Power of Attorney, and Last Will & Testament for one low price. 

There are no more reasons to hesitate. Get started today!

Want to read more from our “Myth Buster” series? Click the links below to follow along as we break down these other common estate planning myths: 

Is there a question here we didn’t answer? Browse more topics in our Learn Center or chat with a live member support representative!