If you’re a millennial, you’re part of the biggest generation in American history. But just like everyone else, you need to plan for the future, and that includes estate planning. Surprisingly, less than a third of American adults have a will or living trust. It’s not a fun topic, but it’s important to start thinking about your personal, financial, and legal future.
So, what is estate planning? It’s preparing for what happens if you become incapacitated or pass away. An estate plan is a set of legal documents that you can put together online. It lets you decide what happens after you die or if you can’t make decisions for yourself.
Many people put off making an estate plan until they’re older, but it’s something every adult should have. If you die without one, it can cause a lot of unnecessary work and legal steps for your family. It’s a good idea to make things easier for your loved ones by leaving a clear legal process. The good news is, it doesn’t have to take long. Most younger adults can spend just an hour or two once a year to create and update their estate plans.
There are a few common documents that make up an estate plan. For most millennials, a last will and living will are a good start. A last will lays out your wishes for after you die, like who should take care of your kids or pets, who should handle your estate, how your assets should be distributed, and your funeral and organ donor preferences. A living trust can be used alongside your last will to help your family avoid probate court.
An advance medical directive, or living will, includes your medical care instructions if you become incapacitated. A health care power of attorney assigns someone you trust to make medical decisions for you if you can’t. A conditional power of attorney names someone to act on your behalf in non-health care-specific situations.
A letter of instruction leaves general instructions for your heirs or loved ones. It can point to where your loved ones can find your important documents, like your last will, living will, birth certificate, Social Security card, and financial documents. It could also include passwords to important accounts.
Estate planning for millennials can involve some unique issues. If you have children, that changes everything. You need to choose a guardian and provide for your child’s financial, medical, and personal needs. If you have pets, you need to make sure they’re taken care of. If you’re living with a partner but not married, you can use an estate plan to give yourselves some of the same protections and rights that married couples have.
As your parents get older, you may need to consider their care and financial situation. You’ll also need to think about your assets, like retirement plans and brokerage accounts, and how they’ll be distributed. Digital assets, like social media accounts and online bank accounts, should also be included in your plan.
You should also consider your organ donor and funeral wishes. Young adults’ organs are often healthier and can be very useful for patients who need a new organ. You can specify that your organs should go to people who need them or to scientific research.
Creating a proper estate plan takes time and effort, but it’s worth it. As you get older and your needs change, you can update your plan. If you have straightforward needs, you can use an online service. But if you have large assets or a high net worth, it’s a good idea to talk to an experienced estate planning attorney.
