If you are under 35, chances are you have given very little thought to your own estate planning. Most people in the group known as “Millennials” are involved in work and volunteering. They’ve not had to think about the need for a Will. Sometimes it takes the unexpected death of a family member or friend to bring the reality of our mortality into sharp focus. The arrival of a baby can awaken us to the need to plan for the care of this new life if the unthinkable happens.
Basic Estate Planning for Millennials
Even though most millennials can expect to live into their 80s and beyond, it is wise to have some basic estate planning documents in place, especially if you are a parent or have a passionate interest in a cause. It’s never too early to begin planning to meet the needs of your minor children if you should not be there to care for them in the future. Here are the documents everyone should have:
- Advance Care Plan or Power of Attorney for Health Care. If an illness or accident leaves you temporarily or permanently unable to speak or make decisions for yourself, you need to give someone else the authority to make health care decisions on your behalf. You can give someone this authority by means of a health care power of attorney. The catch is you have to do this before the need arises. After the accident or injury, you may not have the mental capacity to sign a legal document.
- General Durable Power of Attorney for financial matters. This document authorizes another person to have access to your financial accounts and other property. This will enable someone you have designated to pay the bills while you are hospitalized or unable to manage your financial affairs.
- Last Will and Testament. No matter how much or how little you have, putting a Will in place will insure that your assets go to the people or charities you want. In a Will you can appoint a person you trust to be the executor of your estate. The Executor is the person who is responsible for distributing your assets as the Will directs. In a Will you can appoint a Guardian to care for your children if the children lose both parents while they are minors. You may not have young children yet, and in that case, you can use your Will to direct distribution of your assets to other family members or to a non-profit or a cause you support.
- Retirement account beneficiary designations. Some types of accounts pass by the instructions in a beneficiary designation, not according to the terms of a Will. A beneficiary is someone you designate to receive assets, such as a bank account, retirement plan or life insurance proceeds, should something happen to you. You can change the beneficiary at any time as your life and circumstances change.
- Life Insurance Beneficiary Designations. Life insurance can provide financial resources for your surviving family members. The amount of coverage you need may be determined by your earning capacity, the number of people dependent on your earnings, the educational needs of your children, and the earning capacity of your spouse. A financial professional can help you make the determination of the amount needed.
Death is one of the only certainties in life. An estate planner can help you put in place the basic documents everyone should have to protect themselves and their family members in the event of the unexpected. The smart thing to do is to get these documents in place while you can, even if you think you’re too young to need it. Your family and loved ones will thank you for it.