Young, Indebted and Healthy?
Date Posted: Sep 11, 2014

Estate planning encompasses a much broader spectrum of issues than most young adults typically envision. Simplifying this broad area of practice, many 20 and 30 something’s presume that the entirety of estate planning involves the drafting of a will – something which can be postponed until they have reached a later stage in life; have more assets; or, perhaps, even children of their own.

Estate planning in early adulthood involves acknowledging not only your own mortality, but also realizing that even without a plethora of assets, one still needs protection.

Even those as young as college freshman would find it prudent to consider utilizing the following legal instruments, keeping in mind that this is by no means an exhaustive list:

1) Living Wills(1) and Powers of Attorney for Personal Care(2): whilst none of us wish to acknowledge the possibility, it is vital to plan for the worst case scenario. A living will and Power of Attorney provide for one’s wishes in the event of permanent loss of consciousness, entering into a vegetative state, or any other instance where one is unable to make medical decisions of their own volition. Perhaps even more importantly, these documents act as a vestige of an individual’s final wishes regarding medical treatment, and thereby negate the need for family members to have to make life-altering decisions on behalf of a loved one. Having the foresight to recognize that family members may not agree on such a decision is vital.

2) Marriage Contracts(3): as one prepares to enter into a lifelong commitment, even with few assets of their own to speak of, it remains important to consider family assets. Family businesses and other significant assets one might inherit in the future, or simply entering into a marriage with a partner who has accumulated a large amount of debt, should prompt the need for a contract outlining how such assets, and liabilities, will be shared in the event of marriage breakdown.

3) Life Insurance: Somewhat counterintuitively, the very fact that a young adult may not have many assets is precisely the reason to ensure that if they suffer an untimely death, their spouse or minor children have some form of income to fall back on. A simple life insurance policy can provide for paying off loans and act as a substitute for lost future income. This is especially important given that young adults are often highly burdened with debt and base family planning on higher future income streams.

Perhaps most importantly, it must be remembered that estate planning is not a do-it-yourself process. The complexity involved in these legal documents, and the long-lasting implications of a plan going awry, necessitate the involvement of an established practitioner to guide one through the multitude of decisions that may, or may not, have been considered, in order to properly plan for the future.

Anticipating future hypothetical circumstances requires more than simple precaution and forethought. Estate practitioners have been exposed to a host of multifaceted scenarios and as a result are able to provide insight and raise considerations which might otherwise be overlooked by someone attempting to canvass the vast and intricate world of estate planning on their own.

Ian Hull

Footnotes added by Concentra Trust:

[1] Also known as Health Care Directives, Personal Directives, etc.

[1] Powers of Attorney for Personal Care are not available in all provinces.

[l] Or Cohabitation Agreements


*Reprinted from the Trust Services Bulletin with permission from Hull & Hull LLP and Concentra Financial. This article does not constitute legal opinion or advice. Readers are cautioned not to act on information provided without seeking specific advice with respect to the particular situation.

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