3 Simple Estate Planning Tips For Millennials
To start, what is a millennial? Generally, it is someone who was born in the early-mid 1980s all the way up to early 2000s. This article is geared for young adults from the 1980s. At this point, you should be out of school, working as a mid-level professional, one kid on the way, considering taking on a mortgage, and realizing you are getting old very fast. Here is some professional legal advice for you: start figuring out your estate plan.
According to a survey conducted in 2011, only one-third of Americans have a will and less than one-half of all Americans have not begun any estate planning whatsoever. I would consider these statistics to reveal that most young people are reckless considering that most of them have dependents. One cause as to why people typically avoid estate planning is because they are bothered by the idea of death. This is understandable but impractical. Dwelling on the mortality of your life will not do you or your family any good. If you are in your late 20s/early 30s, it’s time to wake up and accept your inevitable end. It is crucial to sit down and create a basic plan on what will happen to your property, who should be the guardian of your minor children, and how finances will be managed in case you become incapacitated. This is especially important if you are a new parent or have a child on the way.
Making the appropriate arrangements will save your estate a considerable amount of money and put your family in a more favorable position as far as crucial decisions go. What crucial decisions am I referring to? Through proper estate planning, you will decide who should be designated as the individual to pay the bills of your estate, the bills of your business if you have one, and the bills of your dependents. You decide how your remaining affairs should be handled. If no plan is in place, impactful decisions will be made by people who may not always have your best interest at heart. Take the unpredictably out of the equation by approaching estate planning correctly.
Outlined below are four crucial steps in estate planning for the up and coming generation of go-getters:
- Last Will & Testament
Number one should be obvious: Make a will and put it in writing.
I am going to ask you four simple questions:
Do you have assets (your first generation IPod is now considered an antique and a valuable asset)?
Do you want to control where these assets go after you pass away?
Do you have children or dependents?
Do you want to control who cares for your children after your demise?
If you answered yes to all four, then you need a will in place. Aside from a number of other things a will can do, it controls the transfer of your assets after death and outlines specifications on how your children should be looked after. When you die intestate (without a will), division of your property is established by state law. The law of that state will decide who gets what. Typically the spouse and children will be first in line. In the event you have no family or heirs whatsoever, your property passes to the state. Also, if no guardianship is established for your minor children (or dependents who are mentally incapacitated and require your care), their future rests in the court’s hands.
Not having a will in place may cause glaring issues for your family and friends. For a few hundred dollars, an estate or probate attorney can draw up a simple will. My recommendation is to always have an attorney draw up a Last Will and Testament on your behalf. In the event a will contest were to unfold, the chances of the will being struck down is less likely when drafted by an attorney rather than self-made will.
Tip: Get your will updated whenever a life changing event occurs in your family such as the birth of a new child.
- Life Insurance
Assuming you have people depending on you, and you are not terribly wealthy, you should look into buying a life insurance policy and adding beneficiaries to the plan. Consider this for a second, term life insurance which is essentially a fixed premium throughout the entirety of the policy would cost a 33-year-old nonsmoker around $470 a year which would cover a policy totaling $1 million. Obviously, depending on your health and age, that figure does vary, but if you have a spare $40 a month, term life insurance is a remarkable tool to help your loved ones in the event of your untimely death.
- Healthcare Directives
Estate planning is not always geared towards events happening only after your death. There are instances where you lose the ability to carry out your own wishes. This could be due to a disability and other medical mishaps. Have the following documents in good order to ensure someone will be able to take care of you:
- Durable Power of Attorney: This document allows you to choose an agent to manage your legal affairs & money (bank accounts, mortgage payments, sale of a home, etc).
- Release of Information Form: This form will allow doctors to share your medical records with a designated individual.
- Living Will: With this document, you make a decision ahead of time as to how you want to proceed with medical treatment during incapacitation and while in a coma.
The estate planning documents mentioned in this article are not complicated nor are they expensive. By subscribing to have a Last Will and Testament, a Durable Power of Attorney, a Release of Information form, and a Living Will (aka Healthcare Proxy), you position yourself and your loved ones to avoid major complications.
As an estate planning and probate lawyer in New York, there have been several instances in which I have seen a will struck down or compromised because it was not handled with proper protocol. Always have an attorney take care of a will for you.
To make the millennial’s life easier, our firm has established an all-in-one basic estate planning package. With this package, we will draft a Last Will and Testament, gather appropriate witnesses and have their attestation of the will recorded. Included with this package is a power of attorney, and a living will. Contact us today for more information at (646) 535-1667.