Top 10 Estate Planning Myths: #3 - I'm Too Young
As an estate planning attorney, I routinely hear estate planning myths. This blog series is designed to dispel those myths by providing general legal knowledge about estate planning. There will also be an accompanying video that follows each blog post. This week’s myth covers the mistaken belief of being too young to worry about an estate plan.
In North Carolina, once you are eighteen years old, you are a legal adult. Once you are an adult, it is time to consider an estate plan. Why you might ask? The short answer is that your estate plan is designed not only to handle your assets upon death but to also plan in the event of your incapacity, i.e. your inability to make decisions for yourself while you are still alive. Additionally, North Carolina intestacy law will determine who your property goes to at the time of your death. That default decision may not be what you would choose. It does not matter how old you are, putting a proper estate plan into place will help your loved ones in the future in the event of your death or incapacity. This is especially true as you start checking off life milestones such as marriage, buying a house, having children, or saving for retirement.
I like to tell my clients that incapacity planning is, usually, the more important part of an estate plan because you will still be alive at the time you need that plan to be in place! The statistics show that a 35-year-old has a fifty percent chance of becoming disabled for a period of ninety days or longer before the age of 65 and that one in seven people ages 35-65 can expect to become disabled for five years or longer. Now, this range of disability can certainly vary but those numbers constitute a large percentage of the population. Incapacity planning typically involves making a Durable Power of Attorney, a Healthcare Power of Attorney, and an Advance Medical Directive a/k/a Living Will. It can also mean consulting with a licensed medical professional to create a Medical Orders for Scope of Treatment (“MOST”) form or even executing an Advance Instruction for Mental Health Treatment if you have a mental health diagnosis for which you are being treated.
Now that you know what documents you should consider for incapacity planning, you should know the purpose that each document serves.
Durable Power of Attorney - This document allows you to designate an “Agent” and a “Successor Agent” who can make decisions for you regarding your finances, real property, personal property, and other related matters such as insurance and taxes.
Healthcare Power of Attorney - This document allows you to designate a “Healthcare Agent” or “Healthcare Proxy” and a successor that can make decisions regarding your healthcare in the event that you are unable to do so.
Advance Medical Directive a/k/a Living Will - This document allows you to leave instructions to your Healthcare Proxy and medical professionals regarding end-of-life care, such as whether you wish to be resuscitated, what life-prolonging measures you may want, and in what circumstances these instructions will apply.
MOST Form - This document allows you to create a plan for the treatment options that you wish to receive from your healthcare professionals. It covers treatments such as CPR, medical interventions, use of antibiotics, and IVs and feedings tubes. This form must be signed by a Doctor, Physician’s Assistant, or Nurse Practitioner.
Advance Instruction for Mental Health Treatment - This document allows you to create a plan for mental health treatment in situations where you are incapable of giving or withholding informed consent for treatment. It covers treatment options for psychoactive medications, admission and retention in mental health facilities, and specific details regarding any current mental health diagnosis and treatment you may have or be receiving.
Incapacity is a statistical likelihood for many people. As such, you need to have a proper plan in place to ensure that your loved ones can assist you and so that your medical professionals will know your wishes. If you do not have a plan in place, your loved ones will likely need to petition the Court to have you adjudicated incompetent and seek the appointment of a guardian. This process can be expensive, intrusive, and it will result in you or a loved one losing many of their rights.
The final piece to your estate plan is making a Will. A Will is important because it gives you the power to control the disposition of your estate instead of allowing the state to do that for you. As noted above, dying intestate (without a Will) is not the ideal circumstance. If you do not have a Will, the State of North Carolina has established a default plan for all North Carolinians based on each person’s circumstances at death. This could result in your estate being split in various ways, such as between your spouse and parents, entirely to your parents, or even to your siblings. Check out the blog post for Myth 1 for a more in-depth look at how your estate could be distributed if you do not have a Will.
While you may think that you are too young to create an estate plan, you aren’t! Every adult should have a comprehensive estate plan in place to ensure that your loved ones have peace of mind and that your wishes are followed. If you have questions or are ready to get started, feel free to schedule a free estate planning consultation with me at your convenience using my Calendly scheduling link: https://calendly.com/coastallegalcounsel/epconsult.
Check back with us next week for Myth #4!