From a production standpoint, today’s working world brings with it increasingly rapid technological growth. From a human standpoint, it brings the beginnings of a massive shift of generations in the workplace. As Baby Boomers retire and Millennials continue to enter the workforce, they become the latest generation to accumulate wealth. This reality opens the door to many new considerations in the years to come. One idea that must not be overlooked is estate planning for Millennials.
As a Millennial myself who has been in the workforce only a handful of years, long-term financial planning beyond a 401k is not on my radar. In my view (and likely in that of most Millennials), maintaining a healthy savings account along with putting a portion of your paycheck away into a retirement account seems to be more than enough for lasting financial success at this stage. Unfortunately, though, this may not be enough, as you need to consider your estate plan as well.
Today, two of every three individuals do not have a Last Will and Testament. This includes most Millennials, who may not deem the action pressing enough at this juncture of their lives. In order for our generation to better understand the value of creating a Last Will and Testament towards the beginning of our professional careers, Stone Legal Group, PLLC has provided answers to common questions that I (along with many in the labor force’s newest generation) have come to hold.
I have very limited financial assets at present. What would be the value of estate planning now?
There are three essential documents in estate planning that all individuals should have: Last Will and Testament, Durable Power of Attorney and Living Will. The Last Will and Testament will set forth your directives as to who will be appointed as Executor of your estate and how you wish for your estate to be distributed (i.e. spouse, family, friends, significant other, or your favorite charity). The Durable Power of Attorney will set forth your directive of who will handle your financial affairs and medical decisions should be unable to do so for yourself. The Living Will sets forth your directives regarding life-prolonging treatment and artificially provided nutrition and hydration. Your need for an estate plan is not driven by your financial status, but your status as an adult.
As I grow older, my estate will change drastically. Won’t I just have to make a new estate plan down the road?
This answer would apply to any individual, regardless of their age, who experiences a life change such as a marriage, divorce, birth or death. Every individual should re-evaluate their estate plan upon the occurrence of these life changing events.
Similarly, if I marry and have children, the heirs to my estate will change. Wouldn’t it be better to hold off on estate planning until I have created my family?
This would be considered a life changing event and would require a modification to your estate plan to meet your wishes. However, prior to a marriage or children, you still need to make provisions for your legacy based on your current situation.
I may relocate to another state during my career. Would this affect my estate plan?
It will not affect your estate plan, but it is always recommended to have your estate plan reviewed by a licensed attorney for that state to make sure it is in conformity with the requirements of that state.
Is an estate plan expensive to have prepared?
There is a reasonable fee involved, however, just like insurance policies, you are investing money to protect your legacy and your heirs.
My take away from this information is that you are never too young, you are never too old, but you can be too late with your estate plan.
Brian Hancock, Practice Representative
Stone Legal Group, PLLC