Between student loans and millennials often delaying getting married, buying first homes and having children, your first reaction may be that “estate planning” and “millennials” don’t belong in the same sentence. Yet, all millennials are now legal adults and need the basic documents that all adults should have. Millennials with children, pets, student loan debt, and certain assets and goals often require additional planning.
Millennials Need a Durable Power of Attorney and Patient Advocate Designation and Living Will
Legal adults, no matter how young, need a Durable Power of Attorney and a Patient Advocate Designation and Living Will. A Durable Power of Attorney names an agent to act on your behalf with respect to financial and other decisions in the event of your legal incapacity. A Patient Advocate Designation and Living Will spells out end of life wishes and names a patient advocate to act on your behalf with respect to medical decisions if you are unable to meaningfully participate on your own. When you become a legal adult, your parents no longer have this legal role; if you haven’t named an agent, a probate court proceeding can be required before someone is able to act on your behalf.
Millennials May Need a Trust and/or a Last Will and Testament
The need for testamentary documents will depend upon the extent of your assets, the type of assets involved and your goals for those assets. For example, if all assets can be transferred via joint ownership or beneficiary designation, such as a bank account, these documents may not be essential. The need for these documents should be assessed with your estate planning attorney, as many common estate planning goals can only be accomplished with a trust.
Millennials Need a Plan for Their Digital Assets
Millennials grew up online and are the first generation to be considered “digital natives”. From social media and blogs to email and online banking, it’s important to take an inventory of your online presence so your wishes can be honored. Maybe you want your Facebook page memorialized or a financially successful blog continued. Maybe you want to give a relative access to an ancestry or genealogy research account. No matter the asset, it’s important to keep a secure list of user names and passwords with a corresponding instruction for the account, or utilize a reputable service to do so. Talk to your estate planning attorney about who should wind up your online presence after death or monitor it during incapacity, what level of access you want your agent to have, and how any “online tools” such as Facebook’s Legacy Contact or Google’s Inactive Account Manager will impact your estate planning instructions.
For Millennials with Children…
In addition to the above, anyone with minor children needs to name a guardian for their children in the event of the death or incapacity of both parents. The guardian is the person with whom the children will live. A conservator, which is the person who will manage any assets for the children which are not “funded” to the trust, should also be nominated; though if the trust is completely funded as intended, the trustee will manage all of the financial assets for the children instead.
If you have specific ideas as to how an inheritance should be spent and want to place restrictions on assets left to children, a trust is the proper vehicle to accomplish those goals. Common goals include financing education (so children will not experience the often crippling student loan debt experienced by many millennial parents), protecting funds from use until children are old enough to make wise financial decisions, and protecting funds from children’s creditors (including future ex-spouses). Depending on your goals and assets, insurance coverage should be reviewed for sufficiency.
For Millennials without Children…
Your priorities for estate planning will likely be very different if you do not have children. You may be less concerned with ensuring an inheritance in favor of prioritizing the best possible care and comfort for you and, if married, your spouse (and you likely have greater assets to pay for that care because you don’t have the expenses associated with children). You might also prioritize planning for the future of any pets who may outlive you, charitable goals, and/or financially helping nieces and nephews or other relatives.
For Millennials with Pets…
Millennials have adopted more pets than any prior generation and generally consider them to be members of the family. If you have children, you may want to ensure that a family pet stays with your children, providing continuity for both the children and the pet. If you don’t have children, you may prioritize securing your pet’s future above other estate planning goals. While pets are property under the law, a pet trust – where a pet is treated as a beneficiary and not as property to be distributed – can be an important component of your estate plan. Without a legal plan for your pet, a cherished animal could end up with an unintended caregiver, in a shelter or euthanized. For more information, please see our recent publication on how to secure your pet’s future in your estate plan.
For Millennials with Student Loans…
Knowing the differences between federal and private student loans is imperative. Most notably, federal student loans are generally forgiven upon death whereas private lenders will pursue an estate for amounts owed by deceased borrowers. For more on how student loans can impact your estate plan, please see our recent publication on the differences between federal and private student loans.
For Millennials Who Want to Make a Social Impact…
Millennials are known for wanting to make a difference. Discuss your social impact goals with your estate planning attorney. From establishing nonprofit organizations to directing that trust assets be invested in favorite causes, from arranging for environmentally friendly disposition of your body to benefitting favorite charities with life insurance proceeds, your estate planning attorney will be able to make both standard and creative recommendations on how you can accomplish philanthropic goals in your estate planning, even if you do not feel you currently have the resources to make a plan for an impactful gift.
Millennials Want to be Involved and Understood
At Varnum, we know that millennials value advisors who involve them in planning and decision making, who communicate quickly and effectively in convenient means like email and texts, and who understand not only their needs and concerns, but their generational and individual values and goals.
To learn more about how estate planning can benefit you and your loved ones, contact your Varnum estate planning attorney or watch our webinar on estate planning for millennials.