The first steps into adulthood are an exciting yet confusing time, as it comes with several new legal considerations. As such, it is vital to get an early start on learning about what changes when adulthood begins. If you or a loved one are set to become an adult, now is a good time to go over some of the legal changes that come during this important time.
Reaching the Age of Majority
The “age of majority” is a term used to describe a point in time after which a person is legally no longer considered a child. In the past, the age of majority was set at 21 in most states. But after the 1971 ratification of the 26th Amendment to the U.S. Constitution giving 18-year-olds the right to vote in federal elections, most states lowered their age of majority to 18.1 When one reaches the age of majority, they gain several rights, including the right to: 2 3
- Make a will.
- Enter a legally binding contract.
- Vote in federal, state, and local elections.
- Marry without written consent or a parent (or guardian) and a judge.
- Join the military without parental consent.
- Inherit property outright.
- Buy or sell property, including real estate and stock.
Of course, turning 18 also means that you have several new legal responsibilities as well. As a legal adult, you are responsible for your actions, meaning that if you violate any law, you will be charged as an adult. You can be selected for jury duty, and if you are a male, you are legally required to register with the Selective Service System within 30 days of turning 18.4
Privacy & Medical Issues
While there are plenty of advantages to being legally recognized as an adult, the change can also create challenges. This is especially true when it comes to healthcare and medical treatment. For one, once you reach a certain (usually 18), you will no longer be eligible for the pediatric care you previously received, and in some cases, you will need to find a new healthcare provider altogether. To assist with this transition, it is recommended that you check out Got Transition, a federally funded national resource center on health care transition that is designed to improve the transition from pediatric to adult health care.5
Along with the shift into adult healthcare, another major medical concern once you become an adult is dealing with the Health Insurance Portability and Accountability Act, or HIPAA. HIPAA is a federal law that led to the creation of national standards designed to protect sensitive patient health information from being disclosed without their consent or knowledge.6 One of the possible drawbacks of these standards is that your parents lose access to much of your medical information when you reach adulthood. This can potentially create problems as if you are seriously ill or injured and unable to advocate for yourself, your parents could be denied information about your condition or prognosis. To avoid such scenarios, you should fill out a HIPAA Authorization Form at the earliest opportunity, granting anyone that you trust the permission to access your information. Even if you don’t want to give your parents access to your health information, you still grant access to other family members or even close friends.
For a lot of young people, estate planning seems like something that’s only important if you’re rich or older. After all, most people don’t own very much when they are in their early 20’s. Yet the fact is that everyone has an “estate,” whether they realize it or not, so it is important to take time to plan for what happens to it when you’re gone.
It might seem early to start worrying about these types of things, but by taking the initiative now, you avoid creating problems for yourself and your loved ones in the future.
What Is Estate Planning?
Estate planning can be seen as “end of life” planning: it is the process of designating who will receive your assets and handle your responsibilities after your death or incapacitation.1 This encompasses several medical and financial matters: it includes the creation of documents that determine what type of medical care you will receive if you are rendered unable to make decisions for yourself, along with what will happen to your various assets after your passing.
Why Is It Important For Young Adults?
The most obvious reason why you should consider estate planning early is that you never know what life will throw at you. Life doesn’t slow down for anyone, and if the COVID-19 pandemic has taught us anything, it’s that tragedy can come suddenly and unexpectedly. Additionally, once someone turns 18, they are considered an adult in the eyes of the law and must make important legal, financial, or health-related decisions for themselves. This means that if they are rendered unable to make such decisions and have not assigned someone to handle them if they are incapacitated, their friends and loved ones will have little-to-no say in the matter. As such, it is important to have your medical and financial wishes in writing, otherwise, you or your loved ones could wind up in some complicated and emotionally taxing situations.
When you first reach adulthood, the sheer scope of what is possible can be overwhelming. You’re no longer living under the more limited expectations of a child and while you might not be able to do ANYTHING you want, there’s a certain freedom that can’t be denied. However, while we often think or talk about what we want to do, we rarely take steps to actually achieve it. Some might describe this as laziness or a lack of motivation, but more than likely it’s because we don’t know where to start.
Yet by building a life plan, you can determine which goals are worth pursuing and how to work towards them!
Making a Life Plan
A life plan is both a guide and a reminder of what you want to achieve in your life. However, it is not a rigid “to-do” list for yourself: life is unpredictable, so our goals are constantly shifting. Still, creating an action plan based on your personal and professional objectives makes it easier to determine your course of action and figure out how close you are to achieving your goals. An effective life plan also helps you prioritize, positions you to make better decisions, and keeps you feeling motivated.
For many students, their final year of school or university can seem like a farewell party to their youth, a celebration of how far they have come, and a time to look forward to their future. While there are plenty of people who work or have other responsibilities while attending school or university, graduation marks the point where one must fully move on from the student mentality and take their first real steps into the wider adult world. However, this isn’t always an easy transition to make, and while it can be tempting to keep “adult life” out of sight until you leave campus for the final time, it is important to be proactive so that you can hit the ground running once you’re gone.
Obviously, you should enjoy your final year to its fullest, but by taking some time out to prepare for the next phase of your life, you can ensure that you’re ready for life after school.
Preparing Your Resume
Arguably the first step in preparing for a post-graduation is to write or update your resume. Even if you’ve already written a resume before, you should go over it and make sure that it’s ready to show employers, and if you haven’t written one yet, there is no better time than now. Even with some businesses being especially eager to fill positions right now due to the impact of the COVID-19 pandemic, most will still expect you to have a resume ready when you apply.
Your resume should include any jobs that you’ve had, along with your education and any other experience that would make you a good candidate for the type of jobs that you want. When writing about your experiences, you should not only describe what your regular workday included, but what you accomplished for those you worked for. Whether you mention awards and commendations you received or anecdotes showing how you saved your employer’s money, the takeaway should be that you showcased relevant skills and provided significant value to your employer.
Additionally, be aware that different types of jobs might require different skills. It is generally a good idea to have a “master” resume that is more general in its focus than use that as a base to make slightly more specialized resumes that place more emphasis on the skills that are most relevant to the position you are in applying for. If all of this seems a bit overwhelming, consider going to your campus career center, as they can often provide support for improving your resume.
Get a Head Start on Networking
In the professional world, who you know is often just as important as what you know, so you should use your time left on campus by building connections with the people around you and utilizing the resources available to you as a student. A professor can be a vital professional resource, but it’s a lot easier to connect with them while you’re still on campus than after you graduate. Talk to them about your plans for the future, ask for recommendations, and get as much advice as possible.
Another valuable tool for professional networking creating a LinkedIn page. LinkedIn is a social media networking site designed with working professionals in mind. Recruiters and hiring managers use it to assess applicants. A LinkedIn profile essentially serves as both an online resume and an opportunity to reach out to other professionals, so it is a good idea to make one if you don’t already have one.
When making your LinkedIn profile, be as thorough as possible, including all the experience that you included in your resume. You should also include a professional photo of yourself and links to relevant work that you’ve completed. Once your profile is in place, follow people or groups who are relevant to your field of study, connect with people you know, and ask for recommendations from those who have worked with you.
Get Your Finances & Expenses In Order
Whether you are going out on your own or living with family, there are a lot of financial considerations that need to be made when you graduate, especially if you don’t already have a job waiting for you. Along with starting the job hunt BEFORE graduation, you should be sure to have a clear sense of where you are financially before you get your diploma. For one, you should start budgeting yourself, determining your average monthly income, and mapping it out against your expenses. This allows you to determine what is necessary versus what is an option, which will be vital if you’re strapped for cash during life after post-graduation.
Also, if you’ve gone to college, you’ll likely have to deal with student loan payments (unless you’re lucky enough that you aren’t saddled with any student loan debt). Depending on whether you can afford to start paying your loans right out of college, you might need to differ payments until a later date, though this will cost you more in the long run. If you are ready to pay, you should set up a payment plan that is suited to your current income and overall economic situation.
Most importantly, once you start making payments, always pay them on time. This goes for any other payments you must make, such as credit cards or car insurance. Making payments on time is important for establishing a good credit score, which plays a part in many social and financial milestones, so don’t do anything that might hurt your score.
Prepare Six Essential Documents
Once you are a part of the “adult” world, there are several important legal considerations to worry about, which include preparing various legal documents. Generally speaking, there are five legal documents that everyone should have after they graduate.
- Advance Healthcare Directive: (often just called an advance directive) is a legal document that explains how you want medical decisions about you to be made if you cannot make the decisions yourself.1 Since there are several injuries, illnesses, and psychiatric conditions that may leave you unable to make medical decisions, an advance direct allows you to fill out exact instructions on how to handle your health care in the event you are unable to do so.
- Power of Attorney / Durable Power of Attorney: A power of attorney (POA) is a legal document that gives one person (the agent or attorney-in-fact) the power to act for another person (the principal). From there, the agent is given legal authority to make decisions on the behalf of the principal. This typically includes legal or financial affairs, but it can also include medical matters (as seen below). While a standard POA document ends when the principle is unable to make decisions for themselves, a POA can also be designated as a durable power of attorney (DPOA), meaning that the document remains in effect even if the principal is physically or mentally incapacitated.
- Medical Power of Attorney: A medical POA is an advanced healthcare directive that explains how you want medical decisions to be made on your behalf, assigning an agent to make decisions based on your wishes. Since it often covers scenarios where you are physically or mentally incapable of making decisions for yourself, a medical POA is usually also considered a DPOA. Alongside a medical POA, you can also fill out a living will, which sets more specific instructions regarding medical procures and post-care routines.
- HIPAA Authorization Form: The Health Insurance Portability and Accountability Act of 1996 (or HIPAA) is a federal law that led to the creation of national standards to protect sensitive patient health information from being disclosed without their consent or knowledge. Due to these standards, your parents lose access to much of your medical information when you reach adulthood. As such, if you want them to have such access, you will need to fill out an authorization form that permits it.
- FERPA Release Form: The Family Educational Rights and Privacy Act (or FERPA) is a federal law that protects the privacy of student education records. When a student turns 18 years old or enters a postsecondary institution, the rights under FERPA transfer from the parents to the student. This means that unless the student fills out a release form and grants permission to view their records, parents are no longer given free access to them.
- Will: A will is a legal document that spells out your wishes regarding who does (and does not) receive your various assets after your death. If you do not provide a will, this typically leaves any decisions about your estate in the hands of judges or state officials. The most common form of will is a testamentary will (also called a last will and testament), which is signed in the presence of relevant witnesses to better ensure its legal validity.
Thinking About the Future
For impending graduates, it is scary to think about adulthood while you’re still dealing with life as a student. Post-graduation life is full of uncertain times, but the sooner you start making these types of considerations, the easier it to deal with potential hardships and the better prepared you’ll be for the future!
When we are children, our parents usually have free access to our personal information, as we are personally and financially dependent on them. As kids, it makes sense that parents should have easy access to this information. However, as we get older, we might not necessarily want this information to be readily available. As such, there are several laws in place that limit who has access to this information, with one of the most prominent being the Family Educational Rights and Privacy Act, or FERPA.
Taking effect when a student turns 18 or joins a postsecondary institution, FERPA transfers many of the permissions that were previously granted to parents to the student themselves. It is important to understand the many protections offered by FERPA, both for the sake of knowing one’s rights and to know how to grant other people access to your information if needed.
What is FERPA?
FERPA is a federal law that protects the privacy of student education records.1Most of these records fall under parent’s authority when their children are younger, but when a student turns 18 years old or begins attending a postsecondary institution at any age, the rights under FERPA transfer from the parents to the student. These rights include:2
- The right to inspect and review their education record;
- The right to seek to amend their education record;
- The right to have some control over the disclosure of information from education records; and
- Right to file a complaint with the U.S. Department of Education concerning alleged failures by IU to comply with FERPA requirements
FERPA is designed primarily to ensure that school officials do not disclose personally identifiable information about students or permit inspection of their education records without their written permission.
What are Education Records?
FERPA’s privacy requirements cover any records that are directly related to the student and maintained by the college (or a party acting for the college). This includes non-directory information such as:3
- Student’s parents or other family members;
- Student or family address;
- Student’s Social Security number, COD ID number or other identifying number;
- Student’s schedule;
- List of personal characteristics (such as gender, race, ethnicity or religion); and
- Grading or attendance information
Generally speaking, schools must have written permission from the parent or eligible student in order to release any information from a student’s education record. However, there are certain situations where FERPA allows schools to disclose these records without consent. These include the following parties or conditions:4
- School officials with legitimate educational interest;
- Other schools to which a student is transferring;
- Specified officials for audit or evaluation purposes;
- Appropriate parties in connection with financial aid to a student;
- Organizations conducting certain studies for or on behalf of the school;
- Accrediting organizations;
- To comply with a judicial order or lawfully issued subpoena;
- Appropriate officials in cases of health and safety emergencies; and
- State and local authorities, within a juvenile justice system, pursuant to specific State law.
What Can Be Disclosed Without a Student’s Consent?
Under normal circumstances, any directory information can be disclosed without a student’s written consent, as it is freely available to the public. Such information includes the student’s:
- College-issued email address
- Major field of study
- Participating in officially recognized activities and sports
- Weight and height of members of athletic teams
- Terms attended
- Enrollment status (full or part time student)
- Degrees and awards received
- Last educational institution attended by the student
However, schools must tell parents and eligible students about directory information and allow parents and eligible students a reasonable amount of time to request that the school not disclose directory information about them. Students have the right to request that this information be withheld by contacting the Office of Student Records and completing proper documentation.5
FERPA Release Forms
Under FERPA, parents do not automatically have the right to view their child’s records with their express consent. However, a student may grant their parents (or any other third party) permission to access their education records by filling out a FERPA release form. This can sometimes be done electronically, though some universities require students to fill out the form in person to ensure its authenticity.
Regardless, if a student wants their parents to continue to have free access to their education records as they did before they turned 18, they should fill out a release form. Once the student has given prior authorization to access the information, this permission remains in place unless the situation changes. Additionally, if a student no longer wishes for someone to access their records, they can fill out a revocation form, which revokes access.
Knowing Your Rights
While FERPA does have its limits, it is valuable for guaranteeing the protection and confidentiality of student education records. There are of course situations where you would want to grant others access to this information though, so it is important to both know what information of yours is protected and how you grant others to access.
If you have ever attempted to get a hold of someone’s medical documents, then you might have butted up against HIPAA. The Health Insurance Portability and Accountability Act was introduced in 1996 with two main goals in mind: to address the loss of insurance coverage for individuals between jobs and to prevent healthcare fraud. HIPAA has largely been positive, though some see it as an inconvenience. Still, while it might seem like a bother to you, it is a very serious matter for many industry professionals, as neglecting to follow HIPAA rules can lead to massive fines, loss of face, and (for many lower-level employees) a swift firing.
As such, it is important to know what HIPAA is all about, including how to gain access to medical information without running into issues.
What is HIPAA?
The Health Insurance Portability and Accountability Act (HIPAA) was passed by congress in 1996 in an effort to increase privacy surrounding medical information and reduce health care fraud or abuse. It set industry-wide standards for health care information on electronic billing and other processes, while also granting the ability to transfer and continue health insurance coverage for millions of American workers and their families when they change or lose their jobs.1
It also established new rules designed to protect what it refers to as “protected health information” (PHI). This includes any medical information that could specifically identify a person. Outside of certain circumstances, HIPAA prevents various entities and organizations to disclose PHI unless they get the written consent of the patient.
The Three Rules
HIPAA contains three main rules for protecting patient health information. These rules are:
- The Privacy Rule
- The Security Rule
- The Breach Notification Rule
These three rules are uniform across the United States, serving as national standards for protecting any health information that could be used to identify a person.
- The Privacy Rule
The purpose of the Privacy Rule is simple: to determine the right of access to one’s Protected Health Information. Specifically, it guarantees that patients can access their records for a reasonable price and in a timely manner while creating additional requirements for others looking to access this information.2 It also determines which organizations must follow the HIPAA standards, what qualifies as PHI, and the permitted practices for the usage and disclosure of PHI. Healthcare entities covered by HIPAA include most official health plans, health care providers or clearinghouses, and business associates who conduct healthcare transactions for covered entities.
- The Security Rule
The Security Rule sets the standards for the protection of PHI in an electronic format (ePHI), requiring entities to have appropriate administrative, physical, and technical safeguards in place to ensure the confidentiality, integrity, and security of electronically protected health information.3 All healthcare providers who use ePHI and their business associates are covered and must follow the Security Rule. This means that they must protect all ePHI that they create, receive, store, or send.
Any organization covered under HIPAA’s Security Rule must ensure the confidentiality and availability of the PHI, protecting it against all threats to its security and integrity. This includes adopting suitable policies and practices, training employees to better ensure compliance, and performing regular risk analysis to mitigate potential dangers. It is recommended that organizations conduct risk analysis annually, as there are always new risks to be concerned about.4
- The Breach Notification Rule
Under HIPAA, any and all PHI usage or disclosures that aren’t permitted under the Privacy Rule are considered a breach. An impermissible use or disclosure of protected health information is presumed to be a breach unless the covered entity or business associate can demonstrate at least a low probability that the protected health information has been compromised based on a risk assessment.5 As such, the Breach Notification Rule requires covered entities to send alerts upon discovery of a breach. Once a covered entity becomes aware of a breach, the alerts have to be sent within the next 60 days.6 Covered entities are required to alert the affected individuals, Health and Human Services (HHS), along with any related business associates.
Knowing What You’re Getting Into
For some, HIPAA’s security requirements can be a source of frustration. For instance, parents with children who have recently turned 18 might be frustrated to find that they no longer have immediate access to their child’s medical information, even if they wind up in a serious accident. Situations like this can make the law seem like a problem to be navigated rather than a source of protection.
Still, it is important to remember that at the end of the day, HIPAA exists for the sake of patients. While navigating its privacy requirements can be a challenge sometimes, if you are aware of these issues ahead of time, you can plan accordingly. It typically isn’t difficult to get a HIPAA release form if you need it, and when you realize just how much information hospitals and other health care organizations have on your loved ones, you’ll probably realize why it isn’t more easily accessible.
Just know what you’re getting into and you can mitigate the worst parts of the process.
Setting S.M.A.R.T. Life Planning Goals
When creating a life plan, it is common to fall back on the S.M.A.R.T. criteria when writing your goals. Originally a management concept was presented as a smart way to write management goals and objectives. The S.M.A.R.T. Process is as follows:
- Specific: Goals must be as clear and concise as possible in terms of who is involved, what you want to accomplish, and why you want to achieve this.
- Measurable: Goals must have some measurement or milestone to indicate your process so that you can properly add up whether expectations were met.
- Attainable: Goals must be realistic rather than lofty and aspirational. Your goal should test yourself while still being achievable.
- Relevant: Goals should be closely aligned with your business objectives or personal aspirations. If they aren’t, why pursue them at all?
- Time-Based: Goals need a deadline to promote a sense of urgency and increase the chances that you actually accomplish your goal.
Though not everyone uses the S.M.A.R.T. process, the core concepts behind it are sound: if you aren’t specific enough about your goal or if there’s no way to measure it, then success or failure becomes difficult to determine. People often throw themselves into projects they cannot realistically complete or that don’t personally resonate with them. And while some goals have harder “completion dates” than others, if you don’t have at least a rough date to hold yourself, you lack one of the fundamentals for evaluating your progress.
Determining Your Personal Goals
Now that you have a template for setting better goals, it is time to make your plan. You can either do this alone or work with a professional, but the goal is the same: look at your life and recent accomplishments, then consider what you want to accomplish in the future. This isn’t just business and financial goals either: personal, family, health, and spiritual goals are all important, so take some time and make a list of all of your goals.
From there, look at your current life and lifestyle and determine how well it matches up with your goals. For instance, maybe you enjoy working at the company you’re at right now, but you want to work your way up the ladder. This will require a different approach than if you realize you aren’t happy where you are now and that you want to pursue a different career. Regardless of how close or far off your goals might be, you need to come up with a rough estimate of how long it will take to achieve them.
If you’re having trouble deciding on a “deadline,” look more closely at some of your goals and break down the separate steps needed to achieve them. It is often easier to accomplish a goal if you break it into smaller tasks, and it will also make it easier to get a sense of how long it will take to get to the end goal. Finally, once you have a solid sense of what your goals are and when you want to accomplish them, you can create a strategy, whether it’s a weekly schedule or a more generalized “roadmap.”
Looking Towards the Future
Creating goals for yourself and building a plan around them is an important method for getting motivated, organized, and focused on what matters most to you. But remember that, just like life, your plan can need change at the drop of a hat. Always leave some room for adjustment, as even the best-laid plan can come apart due to unforeseen circumstances. Most importantly, take the time to enjoy yourself when you complete your goals. After all, these are your hopes and dreams, so take pride when you accomplish them!
Preparing For The Future
When building an estate plan, there are two main documents that you generally need to consider: a will and a trust. As we have previously discussed,1 a will is important for establishing a firm legal precedent for how you want your various assets to be handled. For some, it is the ideal option for handling an estate transfer, but sometimes other solutions are necessary.
A trust offers a viable alternative to a traditional will, though which you should go with ultimately depends on your specific needs.
What Is a Trust?
A trust is a legal document that grants a third party (called a trustee) the right to hold and direct assets in a trust fund on the behalf of a beneficiary.2 Trusts can be arranged in many ways to specify how and when various assets are passed on to one’s beneficiaries. In finance, a trust can also be a type of closed-end fund built as a public limited company.3
Unlike a will, a trust typically does not go through a probate period, so that beneficiaries usually gain access to the included assets more quickly than they would with a will. Additionally, if it is considered an irrevocable trust (meaning that it cannot be revised after completion), then it may not be considered part of the taxable estate. This results in fewer taxes being due upon your death.4
There are many different types of trusts out there, but all of them fit within a few broad categories:5
- Living or Testamentary: A living trust is a written document where an individual’s assets are provided as a trust for the individual’s use and benefit during their lifetime. A testamentary trust specifies how the assets of an individual are designated after the individual’s death.
- Revocable or Irrevocable: A revocable trust can be changed or terminated by the trustor during their lifetime. An irrevocable trust cannot be changed once it is established.
- Funded or Unfunded: A funded trust has assets put into by the trustor during their lifetime. An unfunded trust consists only of the trust agreement with no funding.
All trusts can be defined by these key elements.
What is a Will?
A will is a legal document that spells out your wishes regarding who does (and does not) receive your various assets after your death. This differentiates a will from a trust, which is a document that gives another party the authority to handle your assets for the benefit of your beneficiaries. Though state laws vary on the specific requirements for a will, the most basic requirements are that they are written by someone over the age of majority who is of sound mind. This person is referred to as a “testator,” while the person they choose to handle the distributor of the estate is the “executor.” In addition to writing the will itself, the testator must also sign and date the document (usually in front of one or more witnesses) and will often notarize it as well.
Different Types of Wills
There are many different types of wills that serve different purposes. Which one you need will depend on your specific circumstances and needs.
- Testamentary Will: A testamentary will, also known as a last will and testament, is a document that is used to transfer the testators’ assets to their beneficiaries after death. Testamentary wills can also be used to appoint guardians for minors, name the executors who carry out the will’s directions, and set up trusts for beneficiaries. Though there are many different types of wills, a testamentary will is often seen as the “traditional” example of such a document.
- Joint Will: A joint will is a document created by two testators who agree to leave their belongings and assets to each other in the event that one of them dies. This is most often done in cases where a couple wants to ensure that when one spouse dies, the other inherits the estate. When the surviving spouse dies, their assets are then handed down to someone the couple named together. However, a surviving spouse cannot change a joint will after the death of their spouse, meaning that if they remarry and have stepchildren, they cannot leave them anything in the joint will.
- Mirror Will: Also called a reciprocal will, a mirror will is actually two separate wills that are drafted almost identically, but have different names as testators and are signed individually. This option is similar to having a joint will, as it allows a couple to form a similar agreement, while also allowing for changes after one of the spouses dies.
- Holographic Will: An uncommon option in modern times, a holographic will is handwritten and signed by the testator. It does not require witnesses or notarization. Instead, the minimal requirements for such documents are proof that the testator wrote the will, evidence that the testator was mentally fit, and that the will contains the testator’s wish to disburse personal property to beneficiaries. Holographic wills are invalid in many states, with those that do consider them valid still placing them under heavy scrutiny.
- Living Will: A living will is an advanced medical directive that serves a different purpose from most other wills. Rather than determining who receives one’s assets after they die, a living is a legal document that includes detailed instructions for your personal medical treatment that both healthcare providers and caregivers are expected to follow, especially if you are rendered unable to make decisions for yourself.
The Importance of a Well-Written Will
When someone dies without a valid will, it is called dying intestate. Dying intestate can be far more expensive than preparing a will and estate plan, as it will typically leave any decisions about your estate in the hands of judges or state officials. With state courts and lawyers potentially getting involved, your family and loved ones could end up spending a lot of additional time, money, and emotional energy sorting out your affairs after you are gone, so it is a better idea to simply write a will ahead of time to avoid this conflict.
Writing can seem overwhelming, but you can get started by compiling a list of your debts and assets, including any personal property you wish to transfer to a specific person or entity. Still, even if you think you know how you want to distribute your assets, you should still seek out professional legal help when writing a will, as even a slight difference in wording can drastically change the meaning of a legal document. Preparing a will is a complex process, but it will provide a sense of clarity and security that makes the effort worth it.
Comparing & Contrasting A Living Will & A Last Will
One of the many challenges of estate and life planning is that there are many documents that seem similar but serve very different purposes. For instance, it is easy to confuse the terms living will and last will and testament, but they are completely separate legal documents that meet different needs. As such, it is important to remember these differences to ensure that you are filling out the right document for your specific circumstances.
What is a Living Will?
A living will also referred to as an advance directive, is a legal document that usually provides directives regarding the course of treatment that both healthcare providers and caregivers are expected to follow if someone is dying or permanently unconscious and cannot make decisions about emergency treatment.1 This includes any procedures one would or would not like to be performed.2 However, the living will is only acted upon if the person in question is unable to speak or otherwise communicate their preferences for themself. The details of a living will often include considerations such as whether the person would like life-sustaining medical treatments or feeding and breathing tubes to be used.3
With a living will, an attorney-in-fact is named to represent the interests of the living will’s owner.4 This agent communicates with doctors and other medical personnel regarding their client’s wishes as expressed in the living will. Additionally, in most cases when a living will is involved, it is common to also establish a medical power of attorney (medical POA, sometimes called a health care proxy), which grants your agent the authority to make healthcare decisions for you.5 This ensures that even if something isn’t directly covered in the living will, the agent has the authority to make important medical decisions.6
What is a Last Will & Testament?
A testamentary will, also known as a last will and testament, is a legal document that is used to transfer the testators’ assets to their beneficiaries after death. Testamentary wills can also be used to appoint guardians for minors, name the executors who carry out the will’s directions, and set up trusts for beneficiaries.7 A testamentary will is generally seen as the “traditional” example of a will, in contrast to more specialized documents like mirror wills or joint wills.
How Do They Compare?
Outside of the name, there’s very little room for comparison between a living will and a last will and testament. A will and testament dictates the way that your assets will be distributed and utilized following your death, while a living will state your wishes regarding your medical care in the event that you are unable to communicate your wishes. In that regard, a living will is atypical of most other types of wills: a will is typically a document that focuses on posthumous decisions.
In contrast, a living will (as the name implies) mainly sets legal requirements that apply while someone is still alive. There are exceptions to this: after death, a living will grant consent to an autopsy, bequeath anatomical gifts, or direct the disposition of the writer’s remains. Even still, the main focus of a living will is to guarantee the owner’s medical wishes are followed while they are still alive.
How Do They Complement Each Other?
Ultimately, a living will and a last will and testament aren’t two documents that you need to choose between. In fact, it is generally a good idea to arrange for both, as they are two of the most important legal documents that any adult can have. They both ensure that your wishes are being followed during different stages of your life. With a living will, you make certain that in a worst-case scenario, you’ll receive the kind of medical and healthcare that you want, while a testamentary will set clear guidelines for what happens to your assets when you’re gone, eliminating many of the frustrations and expenses that your loved ones would otherwise be stuck with.
So if you lack a living will or a testamentary will, now is a good time to get started.
Trusts VS. Wills
Though they are both important estate planning tools, trusts and wills differ in several important ways. The first and most obvious difference between the two is the amount of time and paperwork involved. Due to the general lack of a probate period, beneficiaries don’t have to wait as much to receive the assets included in a trust compared to those featured in a will. It is also active on signing, so it takes effect almost immediately.
That said, a trust is more limited than a traditional will. A trust only contains any assets or property that you have transferred (in writing) to the trust. This can be a complex process, so few people ever transfer everything they own to a trust. Also, a will can do some important things that a trust cannot. For instance, if you have minor children and want to name a guardian for them, you must use a will, a trust does not have this option. You can also use a will to forgive any debts owed to you.6
Which One Is Right For Me?
The general rule of thumb for estate planning is that nearly everyone needs a will, but not everyone needs a trust.7 Yet both have major benefits that are worth considering. For instance, a trust can greatly streamline the process of transferring an estate after your death, as you can avoid the often lengthy and costly probate period that comes with managing a will. However, there are certain things that a trust cannot cover, so if you have minor children, creating a will is critical to ensure their protection and inheritance.8
That said, you don’t need to choose between one and the other. A trust and a will are two separate legal documents and can function alongside one another. In fact, many testamentary wills (also called a last will and testament) will have a trust written into the document to cover specific beneficiaries.9 Even if written separately, a will and a trust generally don’t override one another, although if any issues arise it will typically be the trust that wins out.10 But so long as you have a capable legal professional working with you to write them, having both a trust and a will is an excellent way to guarantee that your estate is carried out according to your wishes.
When it comes time to estate planning, a will is one of the most important legal documents. Even if you have a good grasp on your current estate plans, there is no guarantee that your desires will be followed up on after your passing. Writing a will sets a hard legal precedent in terms of how you want your estate and various assets to be handled, providing your loved ones with clear guidance and offering yourself a sense of security that your wishes will be carried out.
As a person ages, their ability to make important decisions can become less clear. Additionally, they have a far greater chance of experiencing some kind of health situation in which they cannot voice their own wishes. In these scenarios, there needs to be someone in place who can make decisions for these people and act in their best interests. The easiest way to ensure this is a durable power of attorney. By granting certain legal powers to a trusted agent, you can ensure that even if you are unable to make decisions for yourself, someone will be there to act in your place.
What Is a Power of Attorney?
A power of attorney (POA) is a legal document that gives one person (the agent or attorney-in-fact) the power to act for another person (the principal).1 From there, the agent is given legal authority to make decisions on the behalf of the principal, including legal, financial, or medical matters. There are many different reasons for using a POA: it is often used in the event of a sudden illness, or when the principal cannot be present to sign important legal documents for financial transactions.2
There are many different types of power of attorney, with the most common being special, general, and medical POA.3 While a general POA grants wide legal authority to handle any potential legal scenario, a special power POA is written to be narrow, covering a very specific set of issues or drafted to refer to a specific condition that the principal has. As the name suggests, a medical POA covers a narrow area of focus, such as deciding which medical treatments the principal should undergo.
What is a Durable Power of Attorney?
A durable power of attorney (or DPOA) is a specialized version of a general power of attorney. With a general POA, the authority it grants ends the moment that the principal is deemed incapable of making decisions for themselves. The DPOA is designed so that the document stays in effect even if the principal is mentally capacitated and unable to handle matters on their own.4 If the POA is written as an indication that it is “durable,” this means it will last for the remainder of the principal’s lifetime unless the principal revokes it.5
As with a standard POA, a DPOA can either provide general legal authority or be tailored towards specific needs. For instance, a DPOA might be made to grant an agent the authority to make health-related decisions or to handle finances. Regardless of which specific tasks they are granted the authority to perform, an agent is expected to carry out the principal’s wishes to the best of their ability.6
How Do You Set Up a Durable Power of Attorney?
Setting up a DPOA is fairly easy and doesn’t need to be filed with a court or government office, with the possible exception of a POA related to real estate. Certain states or financial institutions have POA forms that they prefer to use, which can serve as a resource when establishing your POA. Since some financial institutions require that their format be used, be sure to check with any banks or brokers you are using before crafting the documents.7
When you have the proper documents and have determined who will be named as the agent responsible for making decisions, you fill out all the forms, including any specific requirements that you want from your agent in terms of decision making. Once the POA is written, witnessed, and notarized, you should keep one copy safely stored away and while sending additional copies to all relevant parties, including the agent.
Be aware that your POA must be in written form. A verbal agreement is not considered a legal POA, nor is a casually written note or letter.8 Also, remember that you aren’t “done” with the DPOA after you’ve signed off on it. You should revisit your power of attorney documents regularly, at least once a year, to ensure that they still reflect your needs and wishes.9
Last but not least, be sure that the person you choose to serve as your agent is someone that you can trust. With a durable power of attorney, you are giving someone the power to make decisions for you even if you can’t voice them yourself, so you need to choose somebody you believe will act in your best interest. Depending on how complicated or time-consuming the job is, you might be able to choose a family member to serve the role, or you might need to hire a legal professional, who will need to be paid for their services. Either way, it is a matter of trust.
Something that the COVID-19 pandemic has highlighted is that no matter how healthy you are and how cautious you approach a situation, you never know when a health-related emergency with pop up. When that time comes, can you be sure that your best wishes are being followed? By creating a medical power of attorney, is possible to assign a legal agent to carry out your medical wishes, even if you aren’t able to express them yourself!
What Is a Power of Attorney?
A power of attorney (POA) is a legal document that gives one person (the agent or attorney-in-fact) the power to act for another person (the principal).1 From there, the agent is then given legal authority to make decisions on the behalf of the principal. A standard POA ends if the principal is rendered physically or mentally incapable of making decisions, but it is possible to establish what is called a durable power of attorney (or DPOA), which stays in effect even under such circumstances.2 There are several different types of POA documents, each of which provides authority under specific areas of interest. The most common POAs focus on legal or financial matters, such as when the principal is unable to sign important legal documents or complete financial transactions.3 However, another popular form of POA is a medical POA, which (as the name suggests) is centered around health and medical care.
What is a Medical Power of Attorney?
A medical power of attorney (sometimes called a healthcare proxy) is a legal document that appoints someone to make healthcare decisions for you if you are rendered incapable of making them for yourself. Your agent will make health care decisions on your behalf based on the instructions that you have provided in the document. It can include provisions for a wide range of medical actions, including personal care management, hiring a personal care assistant, deciding on medical treatment, and making decisions on medical treatments overall.4 Since it often covers scenarios where you are physically or mentally incapable of making decisions for yourself, a medical POA is usually also considered a DPOA.
A medical POA focuses only on health-related decisions and will be written according to the exact specifications of the principal. For this reason, a medical POA can vary greatly in terms of length and specificity, depending on what the principal wants to cover. Though generally any competent adult can be your agent for a medical POA, there are certain exceptions. In certain states, your physician, health care provider, residential health care provider (a nursing home, etc.) cannot serve as an agent, nor can their employees unless they are a relative of yours.5
What is a Living Will?
Along with a medical POA, you can also fill out another legal document called a living will, which lays out treatment directives that both healthcare providers and caregivers are expected to follow, including what types of medical procedures or post-care routines that principal does or does not consent to.6 It typically focuses more on end-of-medical medical treatment, along with some medical matters that occur after death, such as organ and tissue donation. Unlike a medical POA, a living will only go into effect if the principal is rendered unable to speak for themselves.
While you can choose to have just a living will or just a medical POA, it is suggested that generally a good idea to have both. Doing so will ensure that you have someone assigned to make well-considered decisions for you while also guaranteeing that they follow your exact instructions on certain matters. Along with a living will and a medical POA, you should also consider some other stand-alone medical planning documents, such as a DNR (Not Resuscitate Order) Order and a DNI (Do Not Intubate) Order.7
The Security of a Medical Power of Attorney
It doesn’t matter how prepared you are for the future if you don’t share those plans with others and give people the ability to act on them. By choosing someone that you trust to serve as your agent for a medical power of attorney, you ensure that all of your medical wishes are followed, no matter the situation. It eliminates much of the uncertainty involved in what can be a very scary situation, helping to put one’s mind at ease in the process.
Considering End-Of-Life Care: What Is An Advance Health Care Directive?
Nobody particularly likes thinking about death, but it presents a lot of questions that need to be answered, especially when it comes to how you or your loved ones want to be treated near the end of your life. You might think that you’ll be fine leaving it to the decisions of your doctors or your family members, but sometimes you need to set clear guidelines for how to handle these important health care considerations.
In these situations, it is important to invest some time to develop an advance health care directive.
Understanding Advance Healthcare Directives
An advance healthcare directive (often just called an advance directive) is a legal document that explains how you want medical decisions about you to be made if you cannot make the decisions yourself.1 Since there are several injuries, illnesses, and psychiatric conditions that may leave you unable to make medical decisions, an advance directive allows you to fill out exact instructions on how to handle your health care in the event you are unable to do so.
There are two primary types of advance directives: a living will and a power of attorney.
A living will is the oldest form of an advance directive and the form that is most commonly associated with the term. It usually provides directives regarding the course of treatment that both healthcare providers and caregivers are expected to follow if you are dying or permanently unconscious and cannot make your own decisions about emergency treatment.2 This includes any procedures you would or would not like to be performed on you.3 However, the living will is only acted upon if the person in question is unable to speak
A power of attorney (or POA) authorizes you to designate an agent to make important decisions on your behalf.4 Though this typically only includes financial decisions, you can establish a medical POA (sometimes called a health care proxy), which grants your agent the authority to make healthcare decisions as well. With a standard POA, the authority it grants ends when the principal is deemed incapable of making decisions for themselves. However, a medical POA is usually considered a durable power of attorney (DPOA), which means that the document remains in effect even if the principal is mentally incapacitated and unable to handle matters on their own.5
It is worth noting that while you can choose to have just a living will or just a medical POA, it is generally a good idea to have both. Doing so will ensure that you have someone assigned to make well-considered decisions for you while also guaranteeing that they follow your exact instructions on certain matters. There are also a few additional advance care planning documents that you should consider alongside a living will and a POA. Some common examples include:6
- DNR (Not Resuscitate Order) Order: Tells medical staff that you do not want them to revive you if your heart stops or is beating unsustainably during CPR.
- DNI (Do No Intubate) Order: Tells medical staff that you do not want to be put on a breathing machine.
- Organ & Tissue Donation Forms: Gives permission to donate healthy organs or body parts to another patient in the event of your death.
- Brain Donation Form: Gives permission to have your brain donated to scientific research.
- POLST and MOLST Forms: POLST (Physician Orders for Life-Sustaining Treatment) and MOLST (Medical Orders for Life-Sustaining Treatment) forms provide medical care guidance in the form of a doctor’s orders.
Factors to Consider with a Living Will
If you have any exact preferences in terms of end-of-life care, you should include them in your living will. Even if you have a medical POA and thoroughly trust your agent, you have no guarantee that they will follow your exact wishes unless you put it in writing. There are many different factors to consider when writing a living will:
- Cardiopulmonary resuscitation (CPR)
- Mechanical Ventilation
- Tube Feeding
- Antibiotics / Antiviral Medications
- Palliative Care
- DNR / DNI Orders
- Organ and Tissue Donations
- Donating Your Body
You should also consider if you want life support to be removed if you are found to be irreversibly brain dead, along with how you want your body to be disposed of after death.
In the end, everyone deserves to have control over how they live their lives, and how they spend their final days. An advance healthcare directive gives you control over your final moments, establishing clear guidelines to ensure that your wishes are followed.
Start the Conversation
The benefits of estate planning can seem far off from where you are now, and obviously, everyone has their own unique legal needs to consider. Yet taking the initiative on estate planning has clear benefits, even for younger adults. By creating a solid foundation for your estate planning, you eliminate some of the uncertainty of life and are better prepared for the future. Even if you don’t have a fully fleshed-out estate plan, just getting started will make the process feel less daunting when it becomes a higher priority.
If you have questions about your unique situation or are ready to talk to someone to start making your plan, schedule a free appointment!