Estate Planning for Millennials
Many people seem to think that you must have a certain amount of wealth or be above ‘x’ age before you consider having estate planning documents drafted. Other times, people think that they can put off planning until they’re older, but one thing we know is that life is uncertain, and it is far better to have your plan in place. In general, there are many reasons that justify planning as a young adult.
I would argue that, oftentimes, a Power of Attorney document is the most important. This document allows you to nominate someone to have financial and/or medical authority for you in case you are incapacitated. This is especially important because, if you have not designated an agent under a Power of Attorney, and you become incapacitated, the court will need to establish a Guardianship and/or Conservatorship. The court appointed agent would then make your decisions – which can be problematic for a few reasons. Oftentimes, the person that petitions the court for guardianship over you is somebody that you would never want to be involved in making decisions for you. Additionally, the Guardianships/Conservatorship require court oversite and mandatory reporting, which overall is a costly and invasive process.
If you have children, it’s critical that you have at the very least, simple estate planning documents. In your documents you can include a potential guardian for your children in case something happened to yourself and your significant other. When deciding on a guardian, parents should take into account the proximity of the guardian’s residence to the children’s current home, the lifestyle and religious beliefs of the guardians, and the financial situation of the guardian. Parents should name the same guardian in their wills so as to avoid any confusion in the event both parents die simultaneously. Additionally, it is important to consider how and when your child would inherit. Parent’s may also create a minor’s trust to hold assets passing to a minor child, as children under the age of 18 cannot inherit outright. As such, parents can create a minor’s trust and name a trustee to manage, invest, and distribute the assets to the minor child according to the terms of the trust. The trust may allow distributions for the child’s health, education, maintenance, and support throughout his or her life.
In general, most everyone should have a Will. In their twenties and thirties, young adults often believe they do not own enough to require estate planning. An estate; however, is all your assets - including money, investments, real estate, vehicles, business interests, digital assets (including cryptocurrency), and other personal belongings. No matter how much or how little you own, your possessions need to go somewhere after you die.
If you have fur children, it is also important to make plans for what should happen with them. In your documents, you can create a trust for your pets to pay for their care, or you can direct who you want your pet to go to.
Lastly the health care directive is an important consideration. This document is also known as a medical directive or living will. A health care directive allows for you to convey whether or not you want a certain amount of life saving measures. Oftentimes, these are decisions that revolve around life support – which is a highly personal decision. Having your wishes known as optimal.
While it may be uncomfortable to contemplate being unable to make decisions for yourself as a young adult, accidental injuries, and medical issues happen to young people as well. Making plans while you are competent and able is a prudent course of action and can bring you a sense of calm, knowing you have confronted the possibility and have a plan in place.
