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Independent Declarations
Americans
cherish their personal independence. Each of us has the freedom and
responsibility to make our own personal, health care and financial
decisions upon reaching adulthood (e.g., age 18 in most states). If you
have loved ones who are young adults, or soon will be, then you should
share this article with them. We will review some of the fundamental
threats to personal independence encountered by young adult Americans.
Incapacity
The print and electronic media remind us every day that life can take
some rather unexpected and unpleasant turns. From automobile accidents
to tornados, people are often seriously injured. Aside from injuries,
however, many more people are incapacitated due to various illnesses,
even though reports of their suffering rarely make the evening news.
Nevertheless, the threat of incapacity looms over us all, without
playing favorites. And oftentimes the incapacity is permanent.
Whatever the cause, incapacitated Americans may
lose more than the ability to care for themselves. In the absence of
proper legal planning, they also will lose the ability to select their
own back-up decision-makers for personal, health care and financial
matters. By default, a court will make that selection after a legal
process that employs at least three lawyers, can cost thousands of
dollars and exposes private personal and financial information to the
public record. Thereafter, the backup decision-maker selected by the
court will remain under its supervision, further adding to the ongoing
expense and red tape. Truly, an ounce of legal prevention is worth a
pound of legal cure.
Insurability
Single, young adults are immortal. At least
according tot he images promoted by the advertising wizards on Madison
Avenue and the entertainment gurus in Hollywood. That said, a more
realistic picture of youthful immortality can be found in the obituary
section of your local newspaper. For a variety of reasons, young adult
Americans should demonstrate their personal responsibility by acquiring
a permanent life insurance policy as part of their long-term financial
plan.
The best time to secure a permanent life
insurance policy is at the earliest insurable age. When it comes to life
insurance, health actually buy the policy and money merely pays the
premiums. And premiums are lower the younger the insured. However,
injuries and illnesses can cause even a young adult to be rated (e.g.,
pay more for the insurance, due to less than average health) or to be
uninsurable. (Note: for these reasons, many forward-thinking parents
acquire permanent life insurance on their minor children to guarantee
later insurability for their children as adults, as well as to pay
funeral expenses should death arrive prematurely.)
In addition, permanent life insurance builds equity within the
policy contract on a tax-advantaged basis, making it available in the
future for personal financial independence through withdrawals or loans.
Once the young adult marries, the death benefit feature of the policy
can provide valuable financial security for their family. This could
make a radical difference in the quality of life for the loved ones they
leave behind.
Special
Needs
Not only do parents of a special needs child
face unique challenges in providing for the daily special needs of such
a child while both parents are alive, but they face unique challenges in
protecting their inheritance after both parents are deceased and the
special child becomes a young adult. Properly protected, this
inheritance can help provide an essential financial safety net to help
ensure the future personal independence of a special young adult.
Nevertheless, special legal planning is required to protect both
the inheritance of a special young adult and their access to important
assistance programs. Without such planning, their inheritance may
actually disqualify them from many private and public assistance
programs. Then, once disqualified, what happens when the inheritance
safety net is depleted and the assistance program is discontinued?
Alternatively, careful planning may enable the inheritance to comply
with the letter and the spirit of various rules governing eligibility.
Conclusion
Adult Americans enjoy many freedoms and responsibilities. Sometimes it
is easier to focus on the freedoms at the expense of the
responsibilities. While fundamental legal and financial planning for
young adults has been the focus of this article, these fundamental
threats to personal independence apply to all adult Americans,
regardless of age.
This
publication does not constitute legal, accounting or other professional
advice. Although it is intended to be accurate, neither the publisher
nor any other party assumes liability for loss or damage due to reliance
on this material.
Copyright © 2004 by Integrity Marketing
Solutions. All rights reserved.
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