High school graduation season is nearly over. It’s a celebratory time when parents are perhaps more mindful about ways to secure the futures of their young adult children. This is an excellent time to remind clients with graduates heading off to college this fall that while most 18-year-olds probably don’t have a will, there are several good reasons why they should create one now.

As advisors, you can help clients understand the importance of planning for the unthinkable and how they can talk about it with their teens.

We recommend that as soon as a young person turns 18, the age at which one becomes an “adult” and can enter into a legal contract, a will should be drawn up.

Young People Own Things, Too

Creating a last will and testament sparks young people to consider what happens after they perhaps get married or have children of their own, as well as what they own and what it is worth.

There are more practical reasons for it, as well. Many young people often have some money and other assets, whether from a job that pays well or an inheritance. Also, grandparents and parents often leave belongings to children. If the young person wants to direct where those inherited possessions should go if he or she were to die, then a will would be the best strategy.

Whenever anyone dies without a will, state law determines how assets are disbursed. That can mean less money and long delays for heirs – putting stress on a family already dealing with the death of a young person.

Meaningful possessions to your client’s teen could include a beloved pet, a music collection or even a first car. If something happens to the young person, what is going to happen to the animal, to the collection or the car?

Who Will Raise My Baby’s Baby?

Unplanned pregnancy is another compelling reason for a young adult to draft a will. No matter how much your clients preached abstinence to their teens or educated them on using contraceptives, their kids may still become young parents.

Who will be the baby’s guardian if a young (often unwed) parent dies? The young parent’s will can state who he or she wants the child’s guardian to be.

A Simple Will is a Good Investment

Wills can be created relatively inexpensively. It’s also important to periodically update wills created for young people so as to reflect new assets and additions to their families.

Your client’s estate planning attorney can draft a will for a young person as part of the entire family’s planning strategy. Some attorneys offer annual updating programs that include a simple will being automatically drafted for young members of the family upon their 18th birthdays.

Emphasize to clients that it’s important to have a will created for their teens. Encourage them to do it now – before it’s too late.

Other Documents They Need

While a will helps determine what happens to the young adult’s belongings, there are two other very important estate planning documents we recommend everyone to have:

•    Health Care Power of Attorney
•    Health Care Directive
•    Durable Financial Power of Attorney

These documents grant another person authority to make medical and financial decisions for the 18-year-old should he or she become incapacitated. Often, it’s the parents who are named as power of attorney for the teen. While 18-year-olds are adults in the eyes of the law, most are still fully dependent on their parents, both financially and emotionally.

A Financial Rite of Passage

If parents find it difficult to broach the subject of estate planning with their children, they can camouflage it by including it in a larger conversation about financial issues and telling the child, “We’re going to open a bank account in your name, meet with a financial advisor and write a will.”

Remind clients that young people are often eager to take any first steps that bring them closer to the rights and privileges of adulthood. Creating a will doesn’t have to conjure up thoughts of death. It can put a young person in the mindset of someone who is going to have a successful financial life. A will shows others that the young person has thoughtfully taken on adult responsibilities.

We hope this information is useful to you and helps your clients and their families. If you have a specific case or a question, please don’t hesitate to call our office or click here to set up a time to further discuss.

On June 19, 2017   /   Blog, estate planning, Information, Living Trust   /   Leave a comment

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