Millennials are part of Generation Y, and at this point, they are between 25 and 40 years of age. Less than 30 percent of people in this age group have estate plans in place according to a survey that was conducted by Caring.com.
The unprepared individuals are taking risks, and it is one thing if you are single and you have no children, but it is another matter when there are people depending on you. Estate planning is a must for responsible millennials, and we will demystify the process in this post.
If you have minor children, you should designate a guardian to care for them if it ever becomes necessary. You can nominate someone to assume the role in a will, and the court would honor the nomination unless there is some reason why they feel as though the nominee is not suitable.
Where would your family be financially if you were to pass away unexpectedly? This is an important question that you should definitely ask yourself if you have not done so already.
Your estate plan should include a source of income replacement, and life insurance can serve this purpose. Of course, children cannot handle their own funds, so you have to take steps to protect their interests when you are planning your estate.
You should carry enough life insurance to make sure that your family is comfortable if your income suddenly vanishes. No one can make money materialize out of thin air, but you can carry life insurance, and term life is affordable for young adults.
The revocable living trust is an effective asset transfer vehicle to use because there would be a trustee in place to manage assets on behalf of a child beneficiary. These trusts are also quite useful if this is not a source of concern.
When you have a living trust, you can include a spendthrift provision that would protect the principal from the beneficiary’s creditors. If you do not want them to be able to spend without any safeguards, you can instruct the trustee to provide limited distributions on an incremental basis.
Another benefit is the streamlined estate administration. All the assets would be held by the trust, so the identification and inventory process would be turnkey. Plus, probate would not be a factor, but the court would be involved if you use a will to state your final wishes.
This being stated, if you are going to use a will, you can include a testamentary trust if you have minor children. The executor would establish the trust after your passing if it becomes necessary, and a trustee that you designate would administer the trust.
A comprehensive estate plan will include an incapacity planning component, and for elders, cognitive impairment due to dementia is one of the reasons why it is important. This is relevant for millennials as well because people get seriously injured in accidents, and younger folks can suffer from devastating illnesses.
Advance directives for health care will be part of the plan, and one of them is a living will. You assert your choices regarding the utilization of life-support methods in this document, and you can add organ and tissue donation choices.
There can be situations that arise that are not related to life-support use when you are unable to communicate. To account for this possibility, you can name a representative to act on your behalf in a durable power of attorney for health care.
Another necessary document is a HIPAA release. This will give doctors the freedom to share medical information with your health care representative. For your information, the acronym stands for the Health Insurance Portability and Accountability Act.
You can add a durable power of attorney for property to name someone to manage your financial affairs. If you have a living trust, you can designate a disability trustee when you establish the trust.
We Are Here to Help!
If you know that you should work with a Glastonbury estate planning attorney to put a plan in place, there is no time like the present. You can send us a message to request a consultation appointment, and we can be reached by phone at 860-548-1000.