The millennial generation, which is sometimes called Generation Y, is comprised of people that were between 1981 and 1996. They are in the 24 to 40-year-old range right now, so they are mature adults.
Some people think that estate planning is something that you do when you are old and gray, but in fact, millennials should have plans in place. There are younger adults that understand this, but they procrastinate because they do not know where to begin.
With this in mind, we will provide some basic information about estate planning for millennials in this post.
Create a Will or Trust
You have to facilitate asset transfers to your loved ones when you are developing your estate plan. A simple will is one way to do this, but the revocable living trust can be a better choice in many instances.
One of the good things about a living trust for young families is the fact that you can name a trustee that would manage assets for a dependent child. You would be the trustee while you are living, so you would have total access to the assets.
If you have a will, there is a way that you can account for the management of an inheritance that will be received by a minor child. You can include a testamentary trust, and the executor would create the trust after you pass away if it becomes necessary.
In addition to the asset transfer part of the equation, you can name a guardian for your child in a simple will. Unless the court finds that the person that is chosen is not fit for some reason, the individual that you name would be empowered to care for the child.
Even if you have a trust, you should have a will to account for the guardian designation.
Additional Living Trust Benefits
Living trusts provide benefits beyond the ability to protect a minor beneficiary, and probate avoidance is one of them. A will is admitted to probate, and the court provides supervision during the estate administration process.
Creditors are given time to come forward seeking satisfaction, and the court examines the will to determine its validity. Assets are identified and secured, and they are prepared for distribution to the heirs.
Inheritances cannot be distributed until the court has probated and closed the estate, and it will take eight months or longer in most jurisdictions. Probate expenses reduce the value of the estate, and there is a loss of privacy, because probate is a public proceeding.
Asset transfers that are facilitated through the terms of a living trust are not subject to probate.
At first, the goal is to protect your young family. As the years pass, the revocable living trust can be easily adjusted if and when circumstances change, and this is another advantage.
If you find that you want to include spending safeguards for your beneficiaries, you can add a spendthrift clause. After your passing, the principal would be out of the reach creditors, and you can leave instructions for the trustee regarding way the assets will be distributed.
You do not have to provide lump sum inheritances all at once. The trust can remain intact for an extended period of time, and the trustee can provide incremental distributions.
An estate plan for a millennial should include an incapacity component, and it starts with advance directives for health care.
You should record your life support preferences in a living will, and you can name a representative to make medical decisions on your behalf in a durable power of attorney.
For financial decision-making, you can name a disability trustee to assume the role in the event of your incapacity if you have a living trust. A durable power of attorney for property can be added to empower an agent to manage property that is not held by a trust.
Attend a Free Webinar!
We are conducting a series of webinars over the coming weeks that cover some very interesting and important estate planning topics. There is no charge to join us, so we urge you to take advantage of the opportunity.
You can see the schedule and obtain further information if you visit our webinar page.
Need Help Now?
Our doors are open if you are ready to work with a Los Angeles estate planning lawyer to put a plan in place. You can send us a message to set up a consultation appointment, and we can be reached by phone at 310-337-7696.