Silver linings of the Covid-19 pandemic are few but one worth underscoring is the lesson we have all received in not taking anything for granted. This past year showed that, indeed, no one knows what tomorrow may bring and accordingly millions have responded to the pandemic by getting their affairs in order. This is great news and the best part is that adults aged 18 to 34 have been especially activeâ€”a welcome surprise to estate planning attorneys accustomed to this age group lagging behind.
According to a survey by LegalZoom.com, 32% of young adults who had recently invested in an estate plan did so because of Covid-19 and a further 21% drew up a will specifically because they or someone they knew had contracted this virus. While no doubt admirable, this initiative is not enough; after all, the same survey also found that 62% of US adults donâ€™t have a will and, despite the gains just discussed, young adults are still the worst offenders.
The Covid-19 Catch-Up Young Adults Need to Play
The simple truth is that as soon as an individual reaches age of majority, they need to institute a few basic estate planning documents in addition to having their will in place. At a bare minimum, these include a healthcare directive and durable financial power of attorney. A brief overview of each of these documents explains why they are essential, no matter your age.
- Healthcare Directive (with HIPAA Provision)
This document allows a young adult to designate a person (usually a parent) to make healthcare decisions on their behalf in the instance that they lose their own ability to do soâ€”such as might happen when intubated due to Covid-19, for instance. Including a Health Insurance Portability and Accountability Act (HIPAA) release is important as doing so ensures your designated loved one can access health records which may be crucial to decision making.
- Durable Financial Power of Attorney (POA)
Like the above, this document appoints a loved one or trusted advisor to handle your financial affairs should you become incapacitated. This means that even if you end up unconscious and hospitalized, you wonâ€™t fall behind on rent, credit card payments, or any other essential transactions. When instituting a financial POA, it is important that it be â€œdurable,â€ not â€œconventionalâ€ (or non-durable), as the latter terminates the moment the signatory suffers incapacitating injury.
- A Will
As soon as a young adult commits to a partner or spouse or gains any sort of dependent it becomes even more important to execute a will. Depending on the type of estate plan chosen, this either means a last will and testament or a pour-over will coupled with a living trust. An experienced estate planning with knowledge of your family and finances can help you decide which is best.
The Covid-19 pandemic has had an awful impact on communities and any lessons it has taught are meager compensation. Nonetheless, they are important. Instituting an estate plan is a crucial step to protecting yourself and your loved ones from further strife and, as we have learned, shouldnâ€™t be put off.
To learn more about putting your affairs in order and securing your assets, give our office a call at 512-910-8977 (Austin), 210-570-2458 (San Antonio) or contact us through our website.