Statistics show that the average American waits until the latter stages of life to obtain an estate plan, and while we all hope to live long and healthy lives, many people are leaving themselves in less than ideal circumstances should tragedy strike. In fact, a staggering 78 percent of Millennials and 64 percent of Generation X do not have an estate plan, many of whom have minor children.
While the main component of a complete estate plan, a well drafted will or trust, will effectively and efficiently distribute your assets upon death, it is also a vital instrument to name guardians for minor children. Should someone pass away with minor children and without a well-drafted will appointing a guardian, a judge will decide who will fill this role. The process of appointing a guardian can be extremely difficult for children and can lead to tension and emotional turmoil.
In addition to a will or trust, it is important to have general and medical powers of attorney. A general power of attorney appoints an individual to make financial decisions on behalf of the principal. This includes paying rent or a mortgage, depositing paychecks, and paying routine bills. Further, a medical power of attorney appoints an individual to make medical decisions when the principal is incapable of doing so. Without designating an individual, loved ones will be unable to make medical decisions for the principal in urgent situations. Both powers of attorney are necessary for any legal adult since an individual’s parents or spouse do not have the authority to make legal decisions for the incapacitated person. Overall, a thoughtful and thorough estate plan is necessary for every adult regardless of individual circumstances.