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Why Should Millennials and Gen Zers Care About Estate Planning?

Dear Raider,

I’m in my 20’s and have never thought about estate planning. My older sister recently told me at a family gathering that she has her estate planning documents in place. I don’t understand why she would want to do this at such a young age. What are some reasons why younger adults should care about estate planning?

Thanks!

Manny Rhesins

Dear Manny,

Many people mistakenly think that estate planning only involves planning for what happens to your assets after your death, and many young people figure that it doesn’t make much difference since they don’t yet own much in the way of assets. But typically, any assets over $50,000 can result in the nightmare of after-death probate. Also, many people don’t realize that estate planning includes incapacity planning (which can also be done on its own, separately from the state planning). This common misconception leads many younger adults to avoid taking proactive steps toward safeguarding what little money they do have and avoiding making plans for their potential incapacity, in case something does happen. The reality is that anything can happen to anybody at any time, regardless of age, that causes them to become incapacitated or results in death. Younger adults are just as susceptible to vehicular and other accidents as older adults, maybe even more so, because many younger adults engage in riskier activities than many older adults and are therefore at an even higher risk of incapacity or death. Without proper advance planning, a young adult who becomes incapacitated winds up putting their family through the nightmare of lifelong probate (guardianship and conservatorship) and the nightmare of having to file annual accounting and reports with the court.

Here are just a few of the reasons why younger adults should consider estate planning and incapacity planning:

  • A well-drafted advance medical directive will cover your preferences regarding medical treatment and end-of-life care, including whether you choose to donate your organs (including vital tissue such as skin and bones) for transplant and treatment only, or also for scientific research. This is a distinction you can’t make on your driver’s license.
  • A well-drafted general power of attorney grants a chosen individual the authority to act on your behalf in financial and legal matters should you become incapacitated and unable to make decisions.
  • These documents are vital as they ensure that your wishes are met and they relieve family members of the burden of making potentially agonizing choices during dire circumstances.
  • A Caring.com survey revealed that 20% of adults were prompted to create a trust or will upon having a child. This is wise, because only by writing a will can you ensure that the loved ones of your choice will become guardians for your children in the event of a tragedy.
  • For young adults traveling the world or moving away from home for the first time, incapacity planning and estate planning documents allow your parents, siblings, friends, or whoever you choose to take care of your health and financial affairs should something happen to you.
  • Younger generations are not only saving and investing at an earlier age, but they also are including their digital assets in estate planning. Social media accounts, online subscriptions, digital financial accounts, and cryptocurrencies are becoming increasingly important — and their inclusion in estate planning is crucial.
  • If you own your own home or live with your significant other in a home only one of you owns, estate planning is especially important to ensure that your partner will be able to remain in the home in the event of your incapacity or death.
  • Another major asset young people may own is a small businesses. With the rise of platforms like Etsy, many people own and operate their own small businesses right out of their living rooms. An estate plan is essential to protect a small business that you have put time and resources into. It is especially important to prepare an estate plan if your small business is family-owned, to ensure that it passes down to the next generation or the rest of your family.

As you can see, incapacity planning and estate planning is not only for the wealthy and older generations. For the reasons listed above and many more, having a basic incapacity plan estate plan can prepare for incapacity and ensure your assets pass to your family and friends at your death. It is also important to remember that incapacity plans andestate plans can be changed at any time. As you advance in your career and possibly start a family, you can update your planning documents as needed. The key is preparing your incapacity plan and estate plan before it’s needed, and with all of life’s uncertainties, you never know when it may be needed.

Hope this helps!

Raider

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About Renee Eder

Renee Eder is the Director of Public Relations for the Farr Law Firm, and gives the voice to the Critters of Critter Corner. Renee’s poodle, Penny, is an official comfort dog who she and her children bring to visit with seniors who are in the early stages of dementia at a local senior home once a month.

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