As a millennial, the term “estate planning” might feel distant and unrelated to your current life stage. After all, you are probably more focused on building your career, paying off student loans, or maybe starting a family. However, estate planning isn’t reserved for the elderly or the ultra-wealthy – it’s a critical aspect of financial planning for everyone, including millennials.
Here’s a simplified guide to help you, as a millennial, understand why estate planning is important and how to get started.
Why Millennials Need Estate Planning
Ensuring Financial Security: Estate planning helps protect your hard-earned assets and ensures they will be distributed according to your wishes.
Medical Directives: If you become unable to make your own health decisions due to an accident or illness, having healthcare directives can ensure your preferences are respected.
Guardianship: For millennials with young children, estate planning includes naming guardians, ensuring your children will be cared for by the people you trust most.
Step 1: Begin with a Basic Will
A will is the cornerstone of many estate plans. It outlines how you want your assets distributed upon your death. Without a will, state laws will decide the fate of your assets, which might not align with your preferences. Plus, this document is used to name a guardian for minor children. So, start by drafting a will.
Step 2: Assign a Power of Attorney
A power of attorney (POA) is a legal document that gives someone you trust the authority to handle your affairs if you’re unable to do so. There are two types that are relevant here: a healthcare POA for medical decisions and a durable POA for financial decisions. Consider assigning both to cover all your bases.
Step 3: Set Up Beneficiaries
Your retirement accounts and insurance policies allow you to name beneficiaries who will receive these funds upon your death. Ensure these designations are up-to-date and align with your overall estate plan.
Step 4: Consider a Trust
A trust isn’t just for the wealthy. It’s a tool that can offer increased control over your assets, and it will facilitate a smooth estate administration process. A revocable living trust can be an especially useful tool for millennials because the device can be easily updated if necessary.
Step 5: Create a Digital Estate Plan
In today’s digital age, you likely have several online accounts. A digital estate plan includes information about your digital assets (like social media accounts, digital photos, or online banking), along with instructions on how to handle them after your death.
Step 6: Review and Update Regularly
Your life circumstances will change – a new job, marriage, children – and your estate plan needs to reflect these changes. Make a habit of reviewing your plan annually or after significant life events.
Step 7: Seek Professional Guidance
While there are do-it-yourself options available, estate laws can be complex. Engaging an attorney can ensure your plan is legally sound and aligns with your unique needs.
If you are ready to do just that, we are here to help. We can gain an understanding of your situation and help you put an initial plan in place as a millennial. As time goes on, we will be perfectly positioned to update your plan as it becomes necessary.
You can give us a call at 908-222-8803 to schedule a consultation at our Warren, NJ estate planning office, and you can alternately send us a message through our contact page
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