As you might expect, millennials are largely unprepared from an estate planning perspective. According to a survey that was conducted by Caring.com, less than 30 percent of people between the ages of 25 and 40 have estate plans in place.
A lot of people would shrug their shoulders and say that it doesn’t matter because of life expectancy. In reality, there is another perspective that is quite compelling if you consider it objectively.
Parents of Dependent Children
How old are the parents of youngsters that are still minors? That’s right, these people are members of Generation Y, and a small percentage of them have taken steps to protect their families.
If you want to roll the dice without an estate plan when no one is relying on you, that’s one thing. However, if you have a young family, estate planning is an absolute must.
Guardianship and Financial Protection
You should address the matter of guardianship when you are planning your estate as a millennial with children. A guardian can be nominated in a simple will, and it is very likely that your choice would be empowered by the court if you die while your children are still minors.
We say “very likely” because the court has to determine whether or not the nominee can serve the best interests of the children. If the court feels as though they do not have the necessary character or overall wherewithal, they could appoint someone another person that is requesting custody.
From a financial perspective, you can use life insurance as an income replacement vehicle, and a trust can be the beneficiary of an insurance policy. If you are using a will, you can include a testamentary trust that would be created after your passing.
The trustee would manage the assets on behalf of minor beneficiaries. Another option that is far superior in many ways is the utilization of a revocable living trust instead of a will as your estate plan centerpiece.
If you have a living trust, you would act as the trustee while you are alive and well, so you would have direct access to the assets at all times. In the trust declaration, you would name a trustee to administer the trust after your passing.
This will provide a turnkey solution if you pass away while your children are still minors, and if they are not, a living trust is still a very effective asset transfer vehicle.
One benefit that you get when you use a living trust is the avoidance of probate. A will is admitted to probate, which is a costly and time-consuming legal process that is a public proceeding. Anyone that is interested can access the records, so there is a loss of privacy.
You do not have to provide lump sum inheritances to the beneficiaries all at once if you have a living trust. If you have concerns about the money management capabilities of the beneficiaries, you can include spendthrift protections and provide limited incremental distributions spread out over time.
We should point out the fact that a married couple could establish a joint living trust. Under these circumstances, the individuals would act as co-trustees, and the survivor would be the sole trustee after the death of one spouse.
Every estate plan should include an incapacity component, regardless of age, and it starts with advance directives for health care.
You can name someone to make medical decisions on your behalf in the event of your incapacity in a durable power of attorney for health care or health care proxy. These would be decisions that are not related to life-support utilization.
To assert your life support choices, you execute a living will, and you can cover your organ and tissue donation preferences as well. If you have a stance on the use of comfort care medications, you can add your instructions.
Doctors cannot provide medical information to anyone other than the patient unless a HIPAA release form is signed, so this is another piece of the puzzle.
For financial matters, you can name a representative in a durable power of attorney for property. Another advantage that you get with living trust is the ability to prepare for incapacity, because you can name a disability trustee.
We Are Here to Help!
Our doors are open if you are ready to work with a Staten Island estate planning lawyer to put a plan in place. You can send us a message to request a consultation appointment, and we can be reached by phone at 332-456-0500.