The Generation That’s Doing Things Differently
As a Millennial, estate planning is likely not something you’ve thought about. Going to school, focusing on your career, growing a family, traveling and other endeavors are a priority at this time in life. Having a comprehensive estate plan, however, should be a priority. And surprisingly, it does not have to be time-consuming or expensive.
Accidents do happen. Very basic documents should be put in place to determine who can make decisions for you should you become incapacitated, either temporarily or permanently. If you have accumulated possessions, have children, social media accounts, or have purchased real estate or other valuable property, it is time to form an estate plan regarding how your assets are to be distributed if fate has its way.
Health Care Directives
This is the most important estate planning document for anyone over the age of 18. In case of lifetime incapacity (whether temporary or permanent), this document gives authority to an individual to make decisions about your medical care. You can appoint a friend, significant other, spouse, or relative to make these decisions. Without this document, a guardianship proceeding would be required, and a judge would need to appoint someone to make decisions for you.
You can also include directions on specific desires regarding health care decisions, you can leave directions on whether you want to be on life-support or not, and you can make or refuse to make an anatomical gift upon your death(i.e., organ donation).
Financial Power of Attorney
A Will appoints an individual to administer your estate, states who your estate should be distributed to, and names guardians for your children if you have children.
Without a will, your assets will be distributed according to the laws of “intestacy”, which means your assets will typically go to your spouse, children, parents, or siblings, depending on your family situation. In some instances, this is okay. In others, it may not be – for example, if you have a significant other, but are not married, your mate will get nothing.
If you have children, you should have a Will to name a guardian. Without a Will, a judge would determine who should be named as a guardian, and you may not agree with who a judge would pick.
Make a Will
Should you have real property, valuable personal property, or a special needs child, consider a trust. Trusts can be established for many different purposes, such as probate avoidance, trusts for children until they are older (e.g. age 30), charity, education, and special needs children. If any of these situations seem to apply to you, you should talk to an estate planning attorney about what type of trust would best suit your goals.
If there are people in your life who rely on you, life insurance may be a good idea. Premiums are very low at this age, even for $500,000 policies. If something were to happen to you, do you have sufficient assets set aside to provide for your spouse or children? Even if you have a surviving spouse, will they be able to make mortgage payments, pay the bills, and provide for your kids’ needs and education without your income? Life insurance can provide peace of mind for your family if catastrophe does strike.
If you are planning on marrying, then consider a prenuptial agreement. These agreements can limit the assets your spouse may receive in case of divorce as well as your death. Such agreements must be entered into before marriage, be voluntary, with full disclosure by both parties of all assets and financial obligations, and not have been unconscionable or grossly unfair when entered into.
If you’re in a committed relationship and don’t intend on getting married, or at least not for awhile, read our blog Together in Life, but Legally Strangers to understand how you can better share your assets with your partner.
Appoint a Social Media Executor
Most of us have an online presence with email and bank accounts, Facebook, Twitter, and others, so it’s time to think of a social media executor. When you pass away, you may want your online community to be aware of the event and to be sure your accounts on all active websites will be closed. Of course, you will have to inform your executor of all online sites where you have a profile and include your log-in information for your cell phone, email, blogs, computer and bank accounts.
For a comprehensive understanding of what goes into Online Account Planning, read our blog.
Periodically Review Your Estate Plan
Once you have your estate plan in place, be sure to review it every few years with your attorney. Changes in your life such as marriage, a move to another state, divorce, remarriage, children, changing your mind about beneficiaries, asset accumulation, and other events need to be accounted for. Your attorney can review any trusts you have established to ensure proper funding and that changes have been made regarding beneficiaries in your Will, life insurance policy, or retirement plans. If you’re still seeking additional information, learn the basics with our blog Estate Planning 101.
Meeting with an estate planning attorney now can get you on the right path toward how you will want your family, current, and future cared for.