Many people believe that estate planning is only for the incredibly wealthy or those who are close to retiring. Millennials today are probably not even considering their estate, especially if they do not have kids, have not bought a home or do not own any major assets. For these reasons, it can be easy to overlook the importance of an estate plan.
Planning an estate as a millennial is naturally going to be different from the generation that came before you. Although it can be difficult to think about matters like death and disability, preparing for these events can make it so much easier for your loved ones to manage if the worst should happen. It may seem like a complicated process, but you can find a few helpful tips for estate planning as a millennial in the sections below.
Why should millennials consider planning an estate?
Estate planning is essentially a plan for what happens in the event that you become incapacitated or die at a young age. If you want someone making decisions on your behalf in the event of these worst-case scenarios, you may be required to designate them using the appropriate documents. Furthermore, if you have children to take care of, you will want to settle who will take care of them after you are gone.
By properly planning an estate, you can ensure that you and your loved ones are prepared for the worst. There are so many important decisions that need to be made on your behalf if you are incapacitated or pass away. If you do not decide in advance, the courts will likely be making your financial and medical decisions for you. The longer you delay your preparations, the more that you are putting you and your family at risk.
Basic Documents for Estate Planning
As you begin estate planning, there are a few basic documents that can get you started on your preparations:
- A Durable Power of Attorney – This document will allow you to name someone as your agent, which will allow him or her to make decisions on your behalf on financial, health and legal matters. You can also provide specific instructions on the durable power of attorney form for your representative such as providing financial support for your partner after you are incapacitated or pass away.
- Your Last Will and Testament – These documents will specify how you want your assets distributed after you die. This will include detailed information about who is responsible for settling your estate (the executor) and who will receive your assets (the beneficiaries). If you have minor children, you will want to name who will take care of them after you pass away. If you do not have a last will and testament, the state will be responsible for handling and distributing your assets.
- A Living Will – This document is used to communicate your instructions if an accident or medical condition leaves you near death or in a persistent vegetative state. This includes what type of medical care want to receive, whether or not to attempt life-resuscitating or sustaining procedures and other medical matters.
Estate Planning Goals for Millennials
Whether you plan things by yourself or you decide to work with an estate planning attorney, you want to ensure that you are meeting the typical goals of preparing an estate for millennials. Here are some basic aspects that you may want to cover in your plan:
Protecting Your Unmarried Partner
Recently, more and more millennials have either been delaying getting married or not marrying at all, which has some obvious impacts on planning an estate. However, these millennials may still be in committed long-term relationships and are looking to protect their partner after they pass away. Unfortunately, unmarried partners do not receive any medical or financial rights that come with marriage.
Fortunately, estate planning allows for millennials to name their partner as their representative in a variety of legal roles in the event of an accident or death. For example, using a durable power of attorney document, millennials can name their partners as their representative when it comes to health care decisions. This power of attorney document will also allow unmarried partners to be able to visit their partner at a medical facility.
Naming an unmarried partner in their will or benefit payouts can also be an effective way to protect them financially. Unmarried partners can be the beneficiary of retirement accounts, life insurance payouts, stocks and bonds and vehicles. It is vital that these documents are prepared in advance while preparing an estate.
Distributing Your Assets
If you have dependents, estate planning is an effective way to ensure that they are protected after your passing. By specifying how your assets will be distributed between your children, parents, siblings or other beneficiaries, you can protect them from having to figure it out after you pass away.
If you have children, you will want to name a personal guardian for them in the event of an emergency. You can also appoint a financial guardian to handle your children’s finances until they become legal adults.
Handling Your Digital Assets
Many millennials spend a significant portion of their lives online and have grown up with more access to technology than previous generations, so it is important to address digital assets when planning an estate. Digital assets can include content found on social media accounts, downloaded apps, photos, videos and other electronically-stored data. Millennials can appoint a digital executor to handle their digital presence and assets after they pass away.
As a part of your estate planning, your executor can distribute your digital belongs such as downloaded e-books, games and music to your beneficiaries. You can also request for them to create a memorial Facebook account, delete any embarrassing photos and posts or take over your blog after you pass away. If you are interested in having a digital executor, make sure you include a detailed list of all your accounts, usernames and passwords as a part of your estate.