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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 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.
Copyright © 2005 Integrity Marketing
Solutions. All rights reserved. Some artwork provided under license
agreement. 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.
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