Many young people mistakenly believe that estate planning is a job reserved for their parents and grandparents. But this is simply not true. If you have young children, you'll need to make arrangements to have them taken care of properly in the event of an accident or other disaster.

Your estate plan should provide direction in the event of your disability.

Your estate plan should also set forth mechanisms in the event of your death, as to who your children will live with, who will manage their finances until they attain the age of 18, and how their inheritance will be distributed to them when they become of age.

Consider the following:
  1. If you have assets to leave your children, you have the ability, through proper planning, to protect your assets from your childrens' creditors, lawsuits, from paying unnecessary taxes, and even from "probate" - a procedure that is undertaken after a person dies in order to ensure that their outstanding debts are paid and their assets are transferred in a proper fashion. Probate can be beneficial and a decision to "avoid probate" must be made on a case by case basis.
  2. A solid estate plan can protect you as well as your loved ones in the event of disability, which is often an overlooked area. Statistically, a younger parent is more likely to be disabled for a period of time than to pass away. Documents called "powers of attorney" can be used to ensure that you choose, in advance, who will make decisions for you if you can't.
  3. A financial power of attorney will permit someone to manage your financial affairs in the event of your disability.
  4. A health care power of attorney will permit someone to make your health care decisions, hire and fire medical personnel, sign consent to surgery, etc., if you become will and are unable to communicate your wishes.
  5. A HIPAA Authorization will permit your health care agent to speak freely to your doctors and to access your medical records.
  6. A good estate plan will ensure that your children are properly cared for after you are gone by having you choose, in advance, a guardian to care for them. You may choose a guardian of the person to raise them, and a guardian of the estate to manage their assets. These positions may be filled by the same person, or they may be held by different people for an even greater level of protection. There is nothing more heartbreaking than a child turning 18 only to find their inheritance has been squandered, or otherwise lost, by poor financial management.
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