For most people in their 20’s and early 30’s, the topic of estate planning seems to be something for older generations to discuss. It follows the natural course that one starts to sort their affairs the closer they get to the end of their life. Of course, this assumes our lives have a definitive timeline. However, life is unpredictable, uncertain, and sadly can be tragic. That is why I urge all millennials to think outside the box and not wait to discuss and take action with their estate planning. It is incredibly important for all ages – young and old – and there are some relatively easy things that millennials can and should do to protect themselves, their beliefs, and their impact on the world.
The Pew Research Center defines “adult millennials” as those who are 18 to 33 years old. With dependent healthcare coverage extending now until age 26, many millennials remain on their parents healthcare plans for extended periods of time after they transition into adulthood. However, many millennials (and their parents for that matter) may not realize that after they turn 18, their parents and other family members no longer have a legal right to access their health information.
Imagine what would happen if a young college student became ill, was rushed to the hospital, but none of her family members could access her health information, talk to her doctors, or make decisions on her behalf. Due to the Privacy Rule of the Health Insurance Portability and Accountability Act (more commonly known as HIPAA), doctors and nurses do not have a legal obligation to discuss a young adult’s medical condition or treatment with his or her parents, even if the parents are footing the medical bill or the young adult is covered by the parents’ health insurance. While the medical provider has the discretion whether to disclose information or talk with the young adult’s parents, it is likely that the medical provider will err on the side of privacy rather than providing such highly confidential information. So, what can you do to avoid this unfortunate situation?
Executing a few simple estate planning documents will allow you to control who can access your health information and make health decisions on your behalf, in the manner you choose, should something ever happen to you. Being a millennial myself, this is something that hits close to home. I recently realized that I had not appointed health care agents to receive my health information and make decisions for me if I was ever in an emergency situation! To close that gap, I chose to execute the following legal documents.
- An advance health care directive, or a medical power of attorney, allows you to appoint an agent to make your health care decisions if you ever become incapacitated and thus unable to make those decisions on your own. Regardless of whether you actually choose Mom and/or Dad to make your health care decisions in the event of your incapacity, your health care agent should nonetheless be a trusted friend or relative. Note that the advanced health care directive can provide specific instructions to the agent regarding care and treatment options.
- A HIPAA waiver, or privacy affidavit, serves as an authorization for specifically named individuals to receive your health information. A HIPAA waiver can give broad authorization for someone to access all of your health information, or caveats can be carved out, such as a prohibition against sharing psychiatric, sexual health, or drug information.
- A living will, is a document separate from your advanced healthcare directive that specifically instructs doctors and nurses what to do if you require life-prolonging procedures. Remember that episode of Grey’s Anatomy where Dr. Yang attends to a code blue patient and the nurse shouts “She’s DNR! Do Not Resuscitate!”? The patient in that episode had a living will in which she had specifically elected not to be kept on life support. Even if you think that your family or loved ones would know what to do in that situation it is important to be specific in a legal document so as to avoid conflict or unintended consequences. Plus, what greater gift can you leave your loved ones than to remove the emotional stress from having to make such a grave life or death decision?
Implementing these important legal documents related to your healthcare will ensure that your medical information and treatment is handled by the people you trust, in the way you want. Personally, after creating my own advanced health care directive, HIPAA waiver, and living will, I felt relieved and assured that my closest and most trusted loved ones would be able to make health care decisions for me according to my particular wishes.
Who Will Control Your Social Media Accounts?
Millennials love their Facebook, Instagram, Twitter, and Snapchat. If a millennial ever became temporarily or permanently unable to handle their own digital accounts, who would take over? Most social media providers have different options and accompanying rules for closing, memorializing, or appointing an agent for an account. Make a digital asset inventory to include a list of all your social media and online accounts and their respective login credentials. You can then instruct those you trust how you would like the account handled in the event of your incapacity or death, and you either give them a copy of your digital asset inventory (that they keep securely) or tell them where to find yours.
In addition, it is would be wise to prepare a durable power of attorney (see below) accompanied by either a will or a trust and include powers to manage your digital assets. Again, make sure that this person or persons have access to your digital asset inventory. While legal documents demonstrate authority to act, administrative headaches and challenges dealing with social and digital media companies will likely cause delays. The fastest way to access an online account will always be with login credentials.
Your Financial Accounts
Young people may not have the type of assets (such as a house) to warrant creating a full-fledged living trust, but they should consider preparing at least a will for the hard-earned assets they do have supplemented with a durable power of attorney.
Millennials should be planning for the possibility of incapacity, not just an untimely death. Dementia and Alzheimer’s are not the only ways a person can lose their mental faculties. Brain trauma, mental illness, a rare disease, and substance abuse are some other ways to become incapacitated at any age, to name a few. In circumstances of incapacity, a millennial would not be able to handle his or her finances. For example, what if you got in a car accident and had to be hospitalized for an extended period of time—who would pay your rent, other bills, or even file your tax return?
A durable power of attorney would give a designated individual or professional fiduciary the ability to handle your financial affairs during the time of your incapacity, much like an executor/personal representative would in a will. It also makes clear at what point incapacitation occurs and how that determination is being made. This avoids the time, hassle, cost, and uncertainty of a court having to get involved to name a conservator/guardian for you.
Another way a millennial should plan to protect their financial accounts is to complete and update beneficiaries on accounts. Commonly, this is done by filling out a pay on death form—directing his or her bank to transfer the assets to a named person upon the account holder’s death—or beneficiary forms for retirement plans or life insurance policies. This ensures that at your death, the funds in your accounts or proceeds of your life insurance policy will be paid directly to your named beneficiary outside of probate.
While I strongly urge everyone (today!) to at least complete and update beneficiaries for all accounts which provide for them, it is not advisable to simply stop there and make this your primary estate planning strategy. Constructing your estate planning entirely around beneficiary designations is fraught with pitfalls and unintended consequences. For example, what if the person you name as a beneficiary cannot be found, cannot accept the gift for personal tax reasons, they are a minor, or they die before you do? In any of these situations, your assets could be lost, sequestered as unclaimed, or controlled and distributed in an unintended way. Moreover, beneficiary designations are triggered only by the event of your death, not any incapacity.
Estate planning is not just for Grandmas and Grandpas—millennials have important reasons to do estate planning as well. That is why it is important to meet with an estate planning attorney to discuss your intentions and to ensure you have the right diversification in planning methods. At Snyder Law, PC, we help people young and old with their estate planning so that your whole family is protected.