The millennials are now between the ages of 25 and 40. This is the period during which many people are raising dependent children. When you take on that responsibility, estate planning becomes an absolute must. Unfortunately, far too many people are completely unprepared.
Caring.com has been conducting annual surveys that measure the estate planning preparedness of adults in the United States. They have found that less than 30 percent of people that are between 25 and 40 have wills or trusts.
Obviously, people in this age group do not pass away from natural causes very often. However, accidents and devastating illnesses can strike anyone at any time. If you are a millennial, you should take action sooner rather than later to protect the people you love.
Nomination of a Guardian
Who would take care of your children if you and your spouse or ex are both gone? You should definitely answer this question in a legally binding manner when you are planning your estate.
If you draw up a will, you can nominate a guardian in the document. The court would still be involved if a guardianship is necessary, but your choice would be honored if the nominee is qualified.
From a financial perspective, you have to make sure that your family will be able to get by if your income disappears. Life insurance can provide an income replacement solution, and term life is quite affordable for members of Generation Y.
Children cannot handle their own finances, so you have to address this reality. If you have a living trust, you would act as the trustee while you are living, and you would name a successor to administer the trust after your death.
The successor trustee would be well-positioned to manage the assets on behalf of a child until they reach adulthood. In addition to this benefit, a living trust will provide other advantages that will serve you well as you start to reach an advanced age.
Distributions that are facilitated through the terms of a living trust are not subject to probate. On the other hand, a will would be admitted to probate, and a time-consuming and costly legal process would ensue.
You also have the ability to protect the inheritances from the beneficiary’s creditors. You can also dictate the terms of the distributions. If you want to make sure that the beneficiary does not burn through their inheritance too quickly, you can provide limited distributions over time.
This being said, if you are not interested in these benefits and you want to use a will as your asset transfer vehicle, you can include a testamentary trust. This type of trust would only be created if you pass away, and the trustee would manage the resources for a minor beneficiary.
Incapacity planning is important for everyone, including millennials, and it starts with advance directives for health care. You can name someone to make health care decisions on your behalf if you become unable to communicate them yourself. These decisions are included in your durable power of attorney for health care.
A living will can be added to record your life support utilization preferences. Your choices would be honored, and the medical representative would not be part of the decision-making process. Your health care agent’s authority would only extend to other types of medical matters.
A provision contained in the Health Insurance Portability and Accountability Act (HIPAA) prevents doctors from revealing medical information to anyone except the patient. You should sign a HIPAA release to give the agent access to your medical records.
Another advantage of a living trust is the ability to prepare for incapacity. You can name a disability trustee that will administer the trust if you lose the ability to handle your own affairs.
Assets that are not held by a trust can be managed by an agent that you name in a durable power of attorney for property.
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Need Help Now?
If you already know that you should work with an Oklahoma City estate planning attorney to put a plan in place, there is no time like the present. You can send us a message to schedule a consultation appointment, and we can be reached by phone at 405-843-6100.