It may seem like a rather odd gift for a young adult, but if your child is about to turn 18 years old sometime this coming year, consider making a birthday present of a simple estate plan.
It isn't as morbid as it sounds. Having an estate plan is part of being an adult. It's also important that you teach the young adults you love the value of planning ahead for emergencies.
And, frankly, this is a gift that benefits you both if there's ever an emergency.
Consider these facts:
- Once a child is aged 18 or older, he or she is a legal adult in the eyes of law -- even if he or she is still in high school and living at home.
- If your child -- adult or not -- is injured or sick and can't direct his or her own care, you'd probably assume you'd be able to handle things. However, you no longer have that automatic right and can be cut out of the loop if the hospital so desires. You wouldn't have any say-so, for example, about life support.
- If your child is unable to handle his or her own finances for any reason, you can't come to the rescue unless you have the financial means to do so on your own. His or her bank account would be locked away.
- Should your now-adult child die with no will (intestate), the court will divide up his or her possessions according to state regulations -- which may or may not be what he or she would have preferred.
These are the basic documents that each young adult needs as part of an estate plan:
- A basic will -- This should be updated periodically as the teen ages and his or her life changes, he or she marries, has children or gains other assets.
- A durable power of attorney for health care and finances -- These can be given to one person or two different people. They only become effective if the teen is incapable of handling his or her own affairs.
- A living will -- This gives your teen a voice about issues like life support and resuscitation.
While it's an unconventional gift, it's a necessary one. It also teaches your child the importance of estate planning early.