Being wealthy is not a requirement for creating an estate plan. Neither is being old,Â retired, having a familyÂ or owning a lot of assets. If you are a Millennial, and you haven’t started estate planning, here’s how to get started.
If you have been avoiding estate planning, you are putting yourself at risk. If you were to become ill or die at a young age, who would you wantÂ making decisions on your behalf? Does that person legally have the right to make those decisions?Â Depending on your stateâ€™s laws, the person you want to make decisions may not be able to without the rightÂ documentation.
You probably don’t wantÂ the courts making financial orÂ medical decisions for you. And if you have children to take care of,Â it getsÂ complicated really quickly. Who will take care of your childrenÂ if you are gone?Â The other thing to consider is your spouse and other family members. Donâ€™t put them in the position of having to deal with paperwork and probate when emotions are running high.
If you’re ready to get started on estate planning, you should work with an estate attorneyÂ whoÂ knows the federal and state laws that apply to your situation. They may also bring up things you didnâ€™t consider because they are experts. Donâ€™t try to create theÂ documents you think you might need yourselfÂ â€“Â you may end upÂ payingÂ moreÂ to have them corrected. (For related reading, see: Top 3 Tips to Find an Estate Planning Lawyer.)
There is some work youÂ canÂ and should doÂ beforeÂ meeting with an attorney. Make a list of all your assets and what you would want done with them. This includes bank accounts, vehicles and that Beanie Baby collection you thought wasÂ going toÂ fund your retirement. If you haveÂ children, decide who will be their guardian and who will control the finances. There are crucial conversations to be had before sitting in an attorney’s office, including arguing with your spouseÂ about whose siblings are more responsible.
Married or single, young or old, parents of two kidsÂ or dog parents, not having estate planning documents is a mistake. These are the most basic estate planning documents for you to get started:
There are two other things to consider when planning your estate. The first is life insurance. Life insurance should beÂ part of yourÂ financial plan and can be a good way to ensure your family can continue to live the life you intended for them if you pass away at an untimely age. For example, if your income is suddenly gone, willÂ your spouse be able to afford to live in your house or raise your children? Procuring a certain level ofÂ financial insurance can make everyone more comfortable. There are plenty of options for insurance, and you can pick what fits your family best.
The other thing to remember is to keep your beneficiaries updated. If youÂ donâ€™t update the beneficiaries on your retirement accounts,Â all theÂ work you did with the estate attorney is useless. Check your beneficiaries on prior and current 401(k) accounts,Â as well as any other retirement accounts. The beneficiariesÂ listed in these accounts take precedent over what is in your will.
As a Millennial, you probably feel your life is just beginning, and the ending of it is too far off to even consider. Unfortunately, we never know when our time will beÂ up; having an estate plan in place will allow you to enjoy your life knowing your family and your assets will be taken care of.
(For more from this author, see: Personal Finance Basics for Millennials.)