#NAMB is here to try and make adulting a bit easier for you. We’re trying to simplify those cringe-worthy terms like Auto Insurance and Fire Insurance. We’re trying to get you to understand finance and prepare you on what to do if you get in a car accident.
Well, now’s the time to add to all that. We’re taking it to a whole new level. We’re chatting with millennial experts in fields that you may have tried to avoid in the past because, well, they can be scary things to think about. We’re currently chatting with an Estate Planning Attorney.
Don’t worry, I did all the work for you. All you have to do is sit back, read, and learn. It’s not overwhelming, I promise.
What is estate planning?
Estate planning is a way to identify those people or causes most important to you (your parents, spouse, children and charities) and determine how you can help them if you become sick/disabled/incapacitated, or when you are no longer around.
Why should you start thinking and acting upon this from a young age? Why is estate planning important to millennials?
A typical millennial first encounters estate planning upon starting a first job. If you were fortunate enough to land a position at a company that offers a retirement plan, you likely filled out what is called a beneficiary form, where you selected the individuals, entities (usually Trusts), or charities that you wish to inherit the assets in the account.
Additionally, though they may not appear as assets initially, millennials will need to develop plans for their digital assets – which could include online accounts like an iTunes music collection, online banking, or even access to social media accounts like Facebook, Instagram, Twitter, etc. Understanding how access and ownership of these accounts works after you become incapacitated or pass away is important.
The first time in which millennials must do what is considered “traditional” estate planning is when they have children. The selection of a Guardian, the person or persons you select to care for the minor child (below the age of 18) if the parent or parents pass away, can only be done through a Last Will and Testament. The selection of the Guardian does not automatically go to the next closest relative. It is important for the parent or parents to select individuals in order to avoid having relatives fight in court over who will get to take care of the minor child.
The plans you create today are not set in stone. You can always edit documents and update your plans at any time down the line, so there is no harm in drafting a Will or other documents now.
How can millennials start taking action in terms of estate planning?
The best and easiest way to start estate planning is to make sure all your assets (401Ks, IRAs, Roth IRAs, bank accounts, etc.) have a beneficiary.
The next step in estate planning would be to create a basic Health Care Proxy. Once you turn 18, you are no longer a minor and your parents are no longer entitled to your personal information, specifically health information. A Health Care Proxy nominates another person (can be a parent, spouse, significant other or close friend) to make health care related decisions for you in case you are in an accident or undergoing surgery and are unable to speak for yourself.
How can this help in the long run?
Estate planning provides peace of mind. It is comforting to know that if something happens to you or a loved one, a plan exists to handle the health related decisions – through a Health Care Proxy and to manage the finances, through the use of a Power of Attorney or Trust. Plus, some should determine who will raise the children – by selecting a Guardian in a Will – and distribute the hard earned assets you have accumulated throughout your lifetime when you pass, through a Will or a Trust.
Why should millennials care?
Millennials are getting to the point in their lives in which their families are starting to change. If they have a child, they should create a Will to select a Guardian. Millennials might begin to inherit money from parents or grandparents, so having some basic knowledge of trust/estate administration would be helpful. Also, as parents and grandparents get older, there is a greater likelihood that they might need some help managing their own health and finances. Understanding the benefits of having an estate plan in place, with a Health Care Proxy, Power of Attorney, a Will and maybe even a Trust in order to protect assets from the costs associated with long-term care (either at home or in a nursing home) would ensure that your family’s wishes are adhered to.
What resources are there out there to make it easy for millennials?
Some of my favorite millennial related follows include @dougboneparth (hey remember him – he was mentioned in our Finance Cheat Sheet!) for financial planning, @IRAGuru4EdSlott for accounting and IRA planning, and @Quantanamo, the “Dear Abby” or arbiter of all conflicts involving estate planning and family money matters.
Michael J. Greenberg, Esq. is an Estate Planning, Elder Law, and Special Needs Planning attorney at Keane & Beane, P.C. in White Plains, New York. He is on the Executive Committees of the Trusts & Estates, Elder Law and Special Needs, and Young Lawyers sections of the New York State Bar Association as well as the National Academy of Elder Law Attorneys (NAELA). Michael received his law degree from Emory University School of Law and his undergraduate degree from Williams College. He is admitted to practice law in New York, New Jersey, Connecticut, and Florida. You can follow Michael on Twitter @MJGElderLaw or email him at firstname.lastname@example.org.