Estate planning is not only for older, wealthier individuals. Rather, financial experts and estate lawyers make it clear that it really is never too early to start the estate planning process. There are some key factors to keep in mind when it comes to estate planning for people under the age of 35.
Focus on the Essentials
When it comes to estate planning for people under 35, the basics – the essentials – typically are most important. Of course, there are instances in which a younger person accumulates a more significant amount of assets at an early age in life. However, that is the exception and not the rule. In those less common cases, a person will need a more complex estate plan.
The most common elements of an estate plan for people under the age of 35 include a will, a living will (or durable power of attorney for healthcare), and a financial durable power of attorney. In addition, at this juncture in life, a person needs to take a close look at obtaining appropriate life insurance. This particularly is the case if a person is married, in a committed relationship or has children.
Estate Planning for Today – Not some Future Date
When embarking on estate planning under the age of 35, a person oftentimes has a mindset based on some future date. This is not solid thinking. Rather, even when a younger person embarks on estate planning, he or she cannot think about some time down the road.
Estate planning, even for a younger person, needs to have a focus on the here and now. What that really means is that a person needs to develop a comprehensive, appropriate estate plan based on the possibility (no matter how remote) of passing away in the more immediate future.
With that objective noted, the need to regularly review an estate plan is imperative. Once a younger person has established a meaningful estate plan, he or she should review it at least annually.
Seek Professional Guidance
A person under the age of 35 need not go it alone when it comes to estate planning. Indeed, that is not advisable at all. A younger individual in need of an estate plan should retain the services of a skilled estate attorney.
People naturally want to maintain control over decisions relating to health care. In some instances, people reach a juncture at which they are unable to actively make these decisions on their own. They must rely on others to act on their behalf.
A durable medical power of attorney is the key instrument to ensure that a person’s health care directives are followed. Adults of all ages, and from all walks of life, are encouraged to create a durable medical power of attorney. There are a number of factors that a person must bear in mind when contemplating the creation of a durable medical power of attorney.
The Importance of Durability
In order for a medical power of attorney to benefit a person who is not able to make medical decisions, it must be what the law calls durable. In other words, a durable power of attorney extends into a situation in which a person is not able to make decisions. If no durability provision exists, a power of attorney is rendered ineffective when the maker of the instrument becomes incompetent or unable to make decisions for some reason.
A Proper Instrument
A durable medical power of attorney must comply with the laws of the state in which it is created. There is a good deal of uniformity in the laws pertaining to durable medical power of attorneys.
Hospitals and medical centers, as well as churches and religious organizations, tend to be resources for standard-form durable medical powers of attorney. In addition, lawyers who practice in the area of estate and probate law are versed at creating these instruments. In fact, in order to ensure that a durable medical power of attorney is a valid and effective instrument, seeking assistance from a lawyer is a sound course to take.
Executing a Durable Medical Power of Attorney
A durable medical power of attorney must be executed properly in order to take effect. This includes being signed in front of a notary public. An attorney can assist in ensuring that this type of power of attorney properly is executed.
Saving the Instrument
The individual designated as the agent-in-fact in a durable power of attorney must have the original of the instrument. Health care providers typically require the original instrument to be presented to confirm that an individual truly is authorized to make medical decisions on the behalf of the person who created the durable medical power of attorney.
Properly creating a durable medical power of attorney ensures that a person’s healthcare directives are carried out. The failure to take the proper steps can result in a person’s healthcare related desires not being considered.
1. Yes, you should have an attorney.
We might be biased on this one, but families agree that having an experienced Bucks County Estate planning attorney by their side makes the process easier and much more thorough. If you or a loved one is considering hiring an estate planning attorney, interviewing and reviewing the credentials of several local attorneys will help begin a working relationship. Maintaining a relationship with your estate planning lawyer is important for not just the creation of the estate, but the maintenance and administration phase with heirs or beneficiaries. Ensuring the experience and rapport are there make the process much more productive. (more…)
All too often, families find their lives in upheaval after a medical emergency strikes a loved one. We hope it never happens so we try to take the appropriate measures – draft a will, compile estate documents, and execute a power of attorney. But sometimes, even those documents aren’t enough when presented to a third party, such as a bank. Requiring more signatures, re-signing and re-notarizing, banks often make a bad time worse when it comes to honoring legal documents. Fortunately, recent changes to Act 95 update the financial power of attorney law in Pennsylvania making it easier for families.
A financial power of attorney is created to provide someone else the authority to access banking capabilities on behalf of an individual. This is considered the principal-agent relationship, with the principal being the owner of the accounts and agent being the trusted individual to act on the owner’s behalf.
Many families do not have a power of attorney until they need one, when a loved one is no longer able to maintain their financial responsibilities due to injury or old age. However, many families have found themselves turned away by banks – they are told their POA does not meet their requirements. That kind of delay and stress is certainly not what anyone wants to deal with when a family member is going through a difficult time.
Hence the recent changes to the financial power of attorney laws. The changes to Act 95 required the addition of specific verbiage within the “Notice” page. The notice must clearly state that the agent must act in accordance with the principal’s reasonable expectations to the extent actually known by the agent and otherwise in the principal’s best interest. Pursuant to section 5601(c), the document must also state that the agent must act in good faith and act only within the scope of authority granted in the POA.
Other changes pertain to the execution of the document. The financial power of attorney must be signed by two witnesses that are not mentioned elsewhere in the POA document; the document must then be notarized.
For banks, liability has always been the concern and source of rejection headaches for families. Fearful of bad POAs that land them in hot water, banks have had to apply their own set of criteria outside the state requirements. Now, banks are held to the fact that they do not have any liability for accepting a “bad” POA (forged signature, etc.) if they accepted it in good faith. The liability actually falls on banks for not accepting a valid POA.
Whether you have or do not yet have a financial power of attorney, an experienced estate planning attorney should review your documents – revisiting pursuant to the changes and updating any out of date information. Has your choice of agent changed? Did you get divorced? There are many questions to consider when thinking about a POA, all of which could become very important later in life. Call our office to discuss financial power of attorneys with a Doylestown estate lawyer, (215) 486-8171.