At 16 you can drive a car. At 18 you can vote and serve in the military. And at 21 you can order a drink in a bar. But, when is the right time to create an estate plan? When should you create the basic documents that will help you and your family make important decisions in the face of an unexpected life event?
While there isn’t a clear-cut answer provided by the state, federal HIPAA privacy regulations, which protect individuals’ private health information, says an “adult” is anyone 18 or older — meaning at 18 not even your parents can access your health information or make medical decisions for you in the event of an accident or illness unless you allow them to.
But there are many reasons to create a basic estate plan early on. Created in conjunction with an attorney, tax advisor and possibly a financial planner, a solid plan dictates things such as which assets should be given to whom. Assets can include everything from bank accounts to real estate to your favorite watch. (Without a plan in place, state law will dictate how your assets are passed along, which typically means the inefficient process of being passed to family members following strict ordering rules and only after numerous filings with the local probate court.) A well-rounded estate plan also includes, as alluded to above, more than just assets or “wealth.” It also takes care of financial and medical decisions, such as giving named individuals access to your financial and medical records or the ability to make medical decisions on your behalf, should they need to.
Below is a checklist of essential components for a basic estate plan, one that all adults, young or old, should have in place: