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How to Talk About Estate Planning with the Young Adult in Your Life

Published: November 23, 2021

With the holiday season upon us, it is the perfect time to discuss estate planning with your loved ones. While most people immediately think of their older loved ones when it comes to estate planning, it is also a great opportunity to discuss the importance of planning with the young adults in your life. While they may think they are too young or don’t have assets worth protecting at this point in their life, getting a head start is greatly beneficial. Below we discuss some talking points you can share with the young adults in your life regarding estate planning.

Why It is Important to Plan Now

As soon as a child turns 18 years old they are considered an adult in the eyes of the law. Many of the rights parents had in making medical and financial decisions for their minor children are no longer available. Not only that, but many major milestones frequently occur in young adulthood such as going to college, buying a house, getting married, getting a pet, and having children

These life events increase the importance of estate planning for younger adults, so they should consider the following while assessing their estate planning needs.

Health Care Proxy and Durable Power of Attorney

Since parents can no longer help out, it is imperative that young adults sign a Health Care Proxy to outline their health care wishes and designate a Durable Power of Attorney to manage financial decisions, should assistance be needed.

Protecting Their Assets

Young adults often don’t realize the value in their estate given high debt loads. However, real estate, cars, jewelry, and family heirlooms all have value, and it is important that these assets are distributed to whom and how they want them. Many young adults are marrying later in life but may still be sharing homes and other assets with significant others. Creating an estate plan can help make sure that an unmarried partner may continue to live in their home, even if it isn’t in their name.

Protecting Their Digital Assets

In an age where young people use the internet for anything and everything, it’s important for families to know where all their digital assets are. Treasured photos that might only exist on a laptop and social media accounts are only scratching the surface of digital assets today. Adding a Digital Executor to their estate will help make sure loved ones are given access to their digital information.

Guardianship Over Children

The moment a child is born, an estate plan becomes imperative. By creating a will and naming guardians for their children they are ensuring they will be in the hands of someone they can trust if anything were to happen. It is important that the young adults in your life understand the importance of making this decision and not leaving it in the hands of a judge. 

Guardianship Over Pets

For families with or without children, planning for pets is another important consideration.  Even if they were to bestow guardianship of their pet to a family member or friend, that still doesn’t mean the new guardian has to care for the pet.  They can protect their pet by setting up a pet trust, and set aside money and greater accountability for your pet’s care.

Protecting Their Family from Probate Court

Considering whether they need to create a trust is an important step in making an estate plan. Preventing their heirs from spending a year in probate court and helping them get access to assets the moment they need it is one of the many benefits of setting up a trust. If they have children and a home, trust planning is an important consideration.

Prevent Burdening Their Family with Student Loans and Other Debt

Student loans are a huge source of debt for many young adults and often take decades to fully pay off.  While federal loans are forgiven if the borrower dies, some private student loans are less generous and may even accelerate the debt after death.  Buying life insurance at a young age can be very affordable and one of the best things they can do to prevent their family from being burdened with student loans if the unexpected happens.

The team at Scott Bloom Law is pleased to introduce our Young Adult Dependent Program, specifically developed to help you as you enter legal adulthood. Being prepared for any crises that may arise as you enter adulthood allows for peace of mind for you and your family. Having the proper paperwork in place now can help you avoid undue stress in the future should an unexpected crisis arise. Contact the team at Scott Bloom Law to schedule a free consultation and to find out how we can help you make the most of your independence.

CLIENT Testimonial

It can be quite confusing to determine which Medicare plan is best for you. There are several types of plans, and each has its own advantages and disadvantages. Understanding some basic features will help you decide how to maximize your healthcare dollars and choices. You should review your choice periodically, especially as elements of the Inflation Reduction Act of 2022 change prescription medication and vaccine policies. Coverage can also change from year to year..

There are three basic types of plans:

  1. Original Medicare
  2. Medicare Advantage
  3. Medigap

Original Medicare

Medicare is a government health insurance plan for people 65 and older. Original Medicare, sometimes called traditional Medicare, comes in several parts. Each part covers different things and has various associated costs. 

Most people do not pay for Part A as it was deducted from their taxes paid while working. It is primarily for hospital visits and nursing care. However, there are many fees associated with being in a hospital that Medicare does not cover, which you still might have to pay out of pocket.

Part B requires monthly premiums, which can be deducted from your social security. You can elect to enroll in part B through Original Medicare. It covers a portion of doctors' visits, durable medical goods, and more. 

Part D covers the cost of many prescription medications. You can add it to Original Medicare or purchase it as part of a Medicare Advantage plan.

Medicare Advantage

Medicare Advantage is offered through private insurance companies that Medicare approves. Most plans include Parts A, B, and D of Original Medicare with some variations from the original. There are a wide variety of Medicare Advantage plans, including Preferred Provider Organizations (PPO) or Health Maintenance Organizations (HMO). PPOs tend to have higher premiums and offer more choices than HMOs. Medicare Advantage HMOs and PPOs often have higher premiums than traditional Medicare because they usually cover more expenses, including prescription drug costs, vision, hearing, and dental.

However, the overall costs, premiums, plus out-of-pocket expenses for Advantage plans can be lower than Original Medicare because the private insurers manage patient care and limit choices. They assemble networks of hospitals and physicians to control their costs and reduce their customer's premiums. They also restrict access to certain providers and increase the cost of care obtained out-of-network.

Traditional Medicare allows people to seek care from any provider participating in Medicare, which includes virtually all hospitals and physicians.

Medigap

Medigap is a co-insurance or supplement to Original Medicare. You can enroll when you first enroll in Part B. It is also available through Medicaid, a union, or a former employer when you qualify for both programs. You can’t have both Medicare Advantage and Medigap plans. Medigap helps cover expenses that Original Medicare does not cover, such as co-pays and deductibles. Due to the enrollment restrictions, you should strongly consider Medigap when you first become eligible.

The Right Choice for You

With all the different plans, parts, choices, and restrictions, it is crucial to consider your priorities for care. Limited access to doctors and hospitals may become important if you need specialized medical care, such as cancer treatment. Before enrolling, consider what specialty hospitals are included in Advantage plans. Likewise, Advantage plans can make it difficult to see a specialist for ongoing and chronic conditions due to limitations in long-term care services. An estate planning lawyer or elder law attorney can help address long-term care planning and the potential to qualify for Medicaid when necessary.

The Kaiser Family Foundation has put together a cost analysis to help you determine when Medicare Advantage would save you money. As you can see, the longer you stay in the hospital, the less advantageous an Advantage plan becomes.

Consumer Reports notes that the JAMA reported that seniors on Advantage plans often get more preventive care than those on traditional Medicare plans. JAMA published a comprehensive paper about how Medicare plan choice affects spending and discovered that Medicare Advantage enrollees usually spend less.

Consumer Reports notes that the JAMA reported that seniors on Advantage plans often get more preventive care than those on traditional Medicare plans. JAMA published a comprehensive paper about how Medicare plan choice affects spending and discovered that Medicare Advantage enrollees usually spend less.

A Guide in Choices after 65

Enrolling in the right Medicare coverage is one of many decisions that will affect your quality of life in your senior years. We are here to help you navigate a wide variety of choices.

If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.

- Medigap, Medicare Advantage, and Traditional Medicare

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CLIENT Testimonial

Scott explained estate planning very thoroughly and in terms we could understand. He let us know our options and we feel that he is very knowledgeable, professional and also a compassionate person. We recommend Scott to our family and friends!
- Fred T., Willow Grove, Pennsylvania

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