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Planning
Today for Today's LifeStyle.
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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
backup 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 to the 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 buys 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 special 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 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.
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