Why Millennials need an Estate Plan
The story of the 21st Century is financial and career instability: Student debt; Credit card debt; The Great Recession; Covid-19; Inflated housing prices; The end of pensions in the private sector; The end of job security and the rise of hybrid working arrangements; The diminishment of union influence; A long cycle of “upward and onward” has ended, replaced by this new era of treading water.
Millennials that have navigated these treacherous waters still managed to purchase homes, start families and fund retirement plans. Protecting loved ones through estate planning remains a fundamental building block of a healthy financial life.
There is no question that planning has become more difficult since the expectations of the previous 65 years have been wiped away. Creating Wills, Trusts, and Powers of Attorney are still necessary to ensure that the coordination between the important people of your life and your assets are in sync. Certain planning decisions remain integral including the selection of a guardian for minor children should both parents predecease.
Razor thin margins separating relative financial security from negative cash flow make estate planning an essential measure for millennial couples. Besides Wills and Trusts, life and disability insurance are valuable tools when the unexpected happens. Naming a partner or spouse as beneficiary of a life insurance policy and retirement account will provide resources directly and relatively quickly outside of the probate process.
Even in this environment clouded with uncertainty, a silver lining exists and that is digital access to ideas and information that previous generations did not have. Synthesizing the collected wisdom of the internet can be problematic, but it allows you to look at planning in three dimensions – how your financial resources function now, how they may grow or contract in the future, and how your legacy will be defined.
To further one’s planning education, seek out financial professionals. Estate planners concentrate on protecting assets and families. Investments, asset growth and devising income streams remain the province of financial advisors and money managers. Building relationships now will bear fruit in years to come as millennials start to inherit their parents’ estates and planning takes on new significance.
Intergenerational cooperation is needed more than ever. For Millennials, education costs, health care costs, and housing costs exploded while bank CD interest rates hovered near or below the rate of inflation. The parents of Millennials may have avoided the worst of these financial crushes during their early adulthood, but they will face incredibly expensive long-term health care costs as they age. Medicaid planning with asset transfers and Irrevocable Trusts will benefit both generations by solidifying millennial finances and controlling long term care costs for their parents.
Some planning is better than no planning. Most of us have seen how deficiencies in planning leads to unfortunate results. Talk to the professionals at Sloan and Feller today to gain a more complete picture of how estate planning will benefit you and your family.