Estate Planning for Millennials

COVID-19 changed many aspects of our lives, including the way we view estate planning. Driven by the uncertainty of the pandemic, many millennials began to prioritize drafting their wills and creating trusts, rather than wait until later in life. Significantly, the millennial generation has unique preferences when it comes to estate planning shaped by the digital landscape, lifestyle trends, societal influences, and their individual interests. But every millennial’s estate plan has one thing in common — it can provide them with peace of mind that their loved ones will be protected.

Why is Estate Planning for Millennials Important?

No one wants to think about their own mortality, but life-changing accidents and illnesses can happen at any time. An estate plan is vital for anyone who wishes to plan ahead, protect their loved ones, and plan for the unexpected, regardless of age. Not only does an estate plan distribute your property at the time of your death — but it can also provide instruction on how you would like your healthcare and financial affairs to be handled in the event of incapacity.

Proper estate planning for millennials is essential for several key reasons. Without having at least a last will and testament in place, your assets and property would be distributed in accordance with Florida law, rather than your wishes. This could potentially result in consequences you had not intended. Proper estate planning can also help to reduce tax burdens and minimize the risk of a contentious family dispute in probate court.

Unique Aspects of Estate Planning for Millennials

The millennial generation is unique in many ways — and their estate plans may look very different from those of previous generations. No matter their income level or wealth, there are a number of societal and personal factors that can influence a millennial’s estate plan. For instance, millennials often wait longer to get married and start families, focusing instead on education and building their careers. Millennials also place a particular emphasis on technology, volunteering, and friendships.

Depending on their specific circumstances, millennials might consider the following when creating their estate plans:

  • Selecting a guardian for minor children — If you have children, it’s crucial to name a legal guardian who you trust to raise them should the unexpected occur.
  • Protecting and distributing digital assets — Digital assets can include music and videos stored on electronic devices, cryptocurrencies, funds in a PayPal account, and frequent flyer miles. It’s crucial to keep a secure list of passwords and leave log-in instructions so that your executor can access these accounts.
  • Designating a caretaker for pets — Pets are a big part of many millennials’ lives, and they can also be included in a comprehensive estate plan. A pet trust can allow you to dictate how your companion animal will be cared for and ensure their caretaker has the resources to meet their needs.
  • Planning for student loan debt — While federal student loans are discharged upon the borrower’s death, a private student loan lender may make a claim against your estate when you pass. If you have a substantial amount of student debt, it’s important to plan for how it will be handled.
  • Carrying out your charitable goals — As a generation often defined by social consciousness, many millennials wish to support charities, grassroots organizations, and crowdfunding campaigns. Establishing a charitable remainder trust can help carry out these goals.
  • Specifying funeral preferences — It’s a good idea to include your funeral preferences in your estate plan, including whether you wish to be cremated or buried. An estate plan can also include provisions regarding whether you choose to be an organ donor or wish to donate your body to scientific research.

Notably, millennials are also more unlikely to get married than past generations, choosing instead to cohabitate. While Florida law entitles a surviving spouse to receive a portion of their husband or wife’s estate if they die without a will, it does not give these same rights to unmarried cohabitants. Providing for an unmarried partner in an estate plan can ensure they will receive the assets or property you intend them to have upon your passing.

What Documents Should an Estate Plan Include?

A last will and testament is the foundation of a comprehensive estate plan. However, there are several other components that should be included. Various types of trusts can be used to help avoid the public probate process and bequeath nearly any assets you own. You might also set up a transfer on death account, which can provide the beneficiary with immediate access to the assets upon your passing.

In addition, an estate plan should include a healthcare power of attorney and a financial power of attorney. These documents give authority to an individual whom you select to make healthcare and financial decisions on your behalf if you become incapacitated. Critically, you should also have a valid living will — also known as an advanced healthcare directive — in your estate plan that outlines your wishes for end-of-life care in the event you are unable to communicate them.

Once an estate plan is in place, it is imperative to review it periodically to make sure it is up to date and reflects any changes that may have occurred in your life. An estate plan may need to be revised after certain events, such as the birth of a child, a divorce, or if a named beneficiary passed. You might also decide to modify your estate plan if you accumulated additional wealth or family relationships have changed.

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