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Adult Education

     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 (i.e., 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 that life can take some rather unexpected and unpleasant turns. From automobile accidents to tornadoes, people often are seriously injured in unexpected events. Aside from injuries, however, many people are incapacitated due to various illnesses, even though reports of their suffering rarely make the evening news. The threat of incapacity looms over everyone, and disaster does not play favorites. Unfortunately for some, incapacity is both unexpected and 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 lose the ability to select their own backup decision-makers for personal, health care and financial matters. By default, a court makes that selection through a legal process that may employ at least three lawyers, cost thousands of dollars and expose 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 in these cases, an ounce of legal prevention is worth a pound of legal cure.

Insurability

     Single, young adults are immortal. At least according to the advertising wizards on Madison Avenue and the entertainment gurus in Hollywood. A more realistic picture of youthful immortality, however, can be found in the obituary section of any newspaper. For a variety of reasons, young adult Americans should consider 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, 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, some parents acquire permanent life insurance for their minor children to guarantee their later insurability as adults, as well as to pay funeral expenses in the event of premature death.]
     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

     Parents of children with special needs face unique challenges in providing for the daily special needs of such a child while both parents are alive. Additionally, they also must consider how to protect any inheritance after the parents are deceased and their children with special needs become young adults. Properly protected, this inheritance can help provide an essential financial safety net to help ensure their future personal independence.
     Nevertheless, special legal planning is required to protect the inheritance of a young adult with special needs, their access to important assistance programs and the potential future needs of other family members. Careful planning may ensure the inheritance complies with the letter and spirit of various rules governing eligibility.