With hitting the work force and starting families, Millennials have a lot on their minds. Estate planning may not even be on your radar. Besides, isn’t estate planning just for older, richer folks? Do you as a Millennial even need an estate plan when you’re young and poor?
The short answer: estate planning is for everyone, including you. But what should your estate plan look like? What documents should you have? What things do you need to consider before deciding on an estate plan?
Family is one of the most important factors to consider when developing an estate plan. So, we are discussing estate planning considerations for Millennials in a variety of family situations over four articles.
- Intro and Part One: Single
- Part Two: Married without Children
- Part Three: Married with Children
- Part Four: Unmarried Couples
Introduction and Part One
Your family situation is one of the most important factors to consider when developing an estate plan. This and the following three articles will cover four separate family situations: Single, Married without Children, Married with Children, and Unmarried Couples. This first article will deal with Single Millennials.
So, you are single with no kids; this scenario describes a lot of Millennials and despite what you may think, having an estate plan is a good idea no matter your situation. It is important to remember that there are two main issues to think about when doing your estate planning: what happens to your “stuff” when you die and who takes care of your “self” when you become incapacitated.
With regards to your “stuff”, the first thing to know is that each state has a set of laws (called intestacy laws) that provide an estate plan by default in situations where a person has not done any estate planning. In New York, if you are unmarried and have no kids, the law says that, unless you have an estate plan directing otherwise, your estate will go to your parents or, if they are deceased, to your siblings in equal shares. End of story.
While this may sound great, these intestacy laws are rigid and do not consider any wishes you may have for any of your property. Are there any specific personal items you want to leave to friends or loved ones? Do you want to leave any of your estate to charity? Do you want to ensure a specific relative does not manage your estate after your death? Do you want to provide for a niece or nephew’s education? What do you want to happen to your online accounts? If you do not create an estate plan, you cannot guarantee that your wishes will be followed.
So, what kind of estate plan should you have to control who gets your stuff? At the very least, we recommend having a Will designating who will receive your assets after your death and who will be appointed personal representative to manage your estate. But remember that a Will may still need to go through probate before your beneficiaries can receive what you left them. There are other ways to leave your estate to friends or loved ones, but wills and trusts are generally the most common. The important thing is that you have a legally enforceable document stating who will receive your assets.
Aside from your “stuff”, you should also have a plan for who can take care of your “self”. Who do you want making your medical decisions if you can’t? Who do you want to be able to manage your assets? What are your desires regarding end-of-life care such as life support?
Maybe you want your parents to be in charge if you become incapacitated. That’s great. But without a document giving your parents the legal authority to make those decisions, medical providers and financial institutions may not allow them to access information about your medical care or financial accounts. If you want someone besides your parents to make these decisions, the need for these documents becomes even more important.
That is why we recommend you have a Power of Attorney and a Health Care Proxy. A power of attorney gives someone (also known as your “attorney-in-fact”) the ability to act for you in financial situations. Your Health Care Proxy gives someone the ability to act for you in medical situations. You can set up both documents so they are not “active” until such a time that you cannot make these decisions yourself.
Regardless of the type of estate plan you have, we recommend you write a letter of instruction to your representatives or family, telling them everything they need to know to manage your estate. What subscriptions or services need to be canceled? What bills need to be paid? Where do you keep the key to your safe deposit box? Where do you keep your assets? What family or friends should they notify of your death? Giving these instructions can make it much easier for your representatives to properly manage your estate after your death.
In addition to writing a letter, you should have a family meeting to let your loved ones know the basic contents of your estate plan and your other wishes regarding your estate and your medical care. How is anyone supposed to know about your estate plan unless you tell them about it? And even if they know about your estate plan, how is anyone supposed to find your documents unless you tell them where they are?
Lastly — and this is especially important for Millennials — we highly recommend you create a digital estate plan detailing how you want your online accounts disposed of and the information your representatives will need to access those accounts. Depending on the laws in your state, you may need to appoint a separate “digital executor” in your estate plan for this purpose.
Finally, it is important to remember that every person’s situation is unique, and your estate plan should be crafted to address your goals, family circumstances, and assets. To discuss what estate plan may work best for you, contact us at Melvin & Melvin, PLLC via email or 315-422-1311 to set up an appointment to discuss your options.
Read the next section Growing Up Smart: Estate Planning for Millennials Part Two: Married with no Children