Let’s admit it, most people view estate planning as something to be done by older people. Since it revolves around death, the stereotype is that you have to be old to have an estate plan. This is simply not true. Death is one of the top uncertainties in life and having a plan for your assets is not only smart because then you are sure of what will happen to your assets, but an estate plan is also a sign of compassion because it will take the stress off your family and loved ones.
A recent article by Wealth Management, “Engage Millennials in Estate Planning”, discusses how it is important for millennials to take control of their future and plan for the unexpected. A survey conducted found that 78 percent of Americans under the age of 36 do not have a will or a trust in place. That is an extremely high amount. Yet, there are several reasons why that 78 percent should consider having an estate plan.
First, many millennials are marrying later in life, or choosing not to marry at all, instead they have life partners. For those who are not married, without a will, the default is for the estate to go to the parents (or in the case of marriage, the spouse), not the significant other/life partner. So, if millennials don’t want their estate going to their parents they need a plan, preferably using trusts instead of wills to avoid probate and maintain privacy.
Second, in the event of incapacity or death, having the proper documentation gives millennials a voice. Once over the age of 18, parents are unable to step in on behalf of their children in the event of medical situations, and without the proper documentation in place parents will have to go to court. For financial decisions in the event of incapacity, millennials need to have established a trust to own assets, or at the very least a durable power of attorney; this will appoint someone to act on their behalf. A health care advance directive (including a living will) should be on file with their primary care physician that outlines preferences for medical care in the event they’re unable to state these for themselves.
Third, millennials have assets. It can come as surprise to them the number of assets they actually have. They usually focus more on the inflows and outflows of cash because they are working on their student loan debt. Now, while many loans would be discharged at death, there can be different rules where private loans are concerned. The assets that millennials need to address though are, retirement accounts (like 401(k)s or other employee benefit accounts), life insurance policies (personally purchased or employer purchased), pets, vehicles, boats, jewelry etc., and digital assets. Digital assets in particular are of importance because most millennials have various accounts and each one deals with legacy access differently. It is important to decide who will have access and what will happen to digital accounts, like if they should be deleted or not after death.
Even though death can seem like a faraway event and incapacitation something that is unlikely to occur, it is important millennials take estate planning off the back burner and start planning for the future and its uncertainties. This will give peace of mind and ensure that their wishes are met.
It’s time for millennials to start planning their estates.
For more information on this and other estate planning topics, visit our website and schedule your consultation today!
Reference: Wealth Management (June 19, 2018) Engage Millennials in Estate Planning