The members of the Millennial Generation, those between 25 and 40 years of age, often believe they do not need an estate plan at the present time.
Caring.com conducts annual surveys to measure the estate planning preparedness of American adults and uncovered an interesting trend this year.
Percentages have been declining over recent years, but there was an uptick in planning among people between 18 and 34. In 2020, 16.4 percent of them had estate plans in place, and the number went up to 26.8 percent this year.
They found that 45 percent of the young adults that decided to put estate plans in place in 2021 were motivated by the pandemic. Unfortunately, the preparedness numbers went down for all other age groups.
Parents of Minor Children
We all know that people usually do not pass away when they are in their 20s or 30s, but it happens every day. You can compare estate planning to the car insurance you carry. It is very unlikely you will total your car, but you want to be protected just in case.
The aspect of this phenomenon that is most disturbing is that most parents of minor children are millennials. If you are going through life without an estate plan as a parent of dependent children, you are doing them a disservice, and this applies to your partner as well.
Core Estate Plan Essentials
Your estate plan should include a simple will you can use to name a guardian to take care of your children if it becomes necessary. The court will honor your choice unless there is some reason why the nominee was not fit to assume the role.
You should make sure your family will be provided for financially. Life insurance can accomplish this for you. Since children cannot handle their own resources, you need to name someone to manage assets on their behalf.
If you establish a revocable living trust, you can be the trustee while you are living. In the trust declaration, you name a successor trustee to assume the role in the event of your disability or passing.
This person would manage assets for the minor child or children until they reach the age of majority and even for a long period thereafter. Your trust should be the beneficiary of your life insurance so it is available for this purpose.
Another option would be to use a testamentary trust, which is a trust contained within the terms of a will.
Your estate plan should also include incapacity planning because young people can become incapacitated due to injuries sustained in accidents and devastating illnesses the same as older people.
A living will is an advance directive for health care in which you indicate your preferences for life support. What this means is that if your doctors decide you have a terminal illness or are persistently unconscious, the choices you made on your living will determine whether life support is continued or terminated, whether pain medication is administered, and whether hydration and nutrition (food and water) are provided.
Likewise, your durable power of attorney for health care states who you want to make medical decisions for you if you become incapacitated.
Another legally binding document you need is a HIPAA release. This stands for the Health Insurance Portability and Accountability Act enacted to protect patient privacy. Doctors cannot share your medical information with your health care representative unless you sign one of these forms.
For financial matters, your living trust authorizes your successor trustee to manage trust assets if you are unable or unwilling. You will also need to name an agent in a durable power of attorney for property to manage your non-trust assets, such as IRAs and retirement accounts. If you do not have a trust, your agent will be responsible for managing all your financial assets.
We Are Here to Help!
Today is the day for action if you are a millennial who is going through life without an estate plan. If you work with our office, you will gain a fuller understanding of your situation, receive answers to your questions, and receive help in devising a plan that is uniquely suited for you and your family.
Schedule a free consultation at our Oklahoma City estate planning office by calling us at 405-843-6100, or you can use our contact form to send us a message.
- Own Property Out of State? You Need a Living Trust - October 21, 2021
- Three Misconceptions That Lead to Estate Plan Mistakes - October 19, 2021
- Your Original Estate Plan May Not Be the Final Version - October 14, 2021