A lot of people think that estate planning is something that you do not have to think about until you are a senior citizen. In fact, according to a survey that was conducted by Caring.com this year, 67 percent of adults do not have estate plans in place.
Surprisingly, only 46 percent of individuals that are 55 years of age and older have wills or trusts, but the numbers are far worse for millennials. This is disturbing because estate planning is important for all responsible adults.
If you are single, you should have a basic estate plan in place as soon as you are an independent adult, but it is especially important for young families. You should make sure that your spouse is provided for come what may, and the stakes get higher when you have children.
Guardianship is an important consideration if you are the parent of a dependent child, and you can designate a guardian in a simple will. The court would honor your nominee unless they find that the person that is named is not in a position to serve the best interests of the child.
You could include a testamentary trust in your will, and it would be created by the executor after your passing. The trustee that is designated would manage the assets on behalf of the child until they reach the age of majority.
The revocable living trust is another option. You would act as the trustee while you are living, and you and your spouse could be co-trustees if you establish a joint living trust.
A successor trustee that you name in the trust declaration would manage the assets on behalf of the children if it becomes necessary.
With regard to the funding of the trust, as we have stated, you still have access to the assets while you are living. To make sure that it is adequately funded if you were to pass away, you can carry the appropriate level of life insurance.
A trust can be the beneficiary of a life insurance policy, and term life is very affordable for members of the millennial generation.
The financial part of the equation is important, but there is another facet to consider when you are planning your estate as a millennial. People sometimes become unable to communicate decisions due to injuries sustained in accidents, and devastating illnesses can have the same effect.
You can take the appropriate steps in advance to name a representative to act for you under these circumstances. This is done through the utilization of documents called durable powers of attorney.
A durable power of attorney for property is used to name someone to manage your financial affairs if it becomes necessary. If you have a living trust, you can name a disability trustee to step into the role in the event of your incapacity.
For medical decision-making, you should add a durable power of attorney for health care. A necessary accompanying document is the Health Insurance Portability and Accountability Act (HIPAA) release.
There is a provision contained in this measure that prevents doctors from sharing medical information with anyone other than the patient. You can sign a release to give your healthcare agent the ability to access your medical records.
Another directive that should be in place is a living will. This type of will is used to state your life support utilization choices. Your preferences will be honored if you have a living will, and your healthcare agent would not be called upon to make any life-support decisions.
Access Our Free Worksheet
We have prepared a worksheet that you can go through to gain a more thorough understanding of this important process. It is free, and you can get your copy if you head over to our worksheet access page.
Need Help Now?
If you are ready to work with a Los Angeles estate planning lawyer to put a plan in place, we are here to help. You can send us a message to request a consultation appointment, and we can be reached by phone at 310-677-9787.