Millennials Need Estate Plans Too
Life has changed. The millennial generation is marrying older and having children later, often due to an increased focus on education, career success, and life experiences before settling down. As a result, many of the milestones that prompt individuals to engage in estate planning – a spouse, children, accumulation of wealth, poor health – are not occurring until much later in life. Without an obligation to support a spouse and children, or identify a guardian, there may not appear to be a need for a will, life insurance, or any other estate planning; however, “unattached” millennials may have more of a need than they realize. Consider a cohabitating partner who would be without any inheritance rights in the absence of a will, parents who would have no access to an incapacitated adult son’s medical information without a written HIPAA authorization or advance medical directive; and what about beloved pets – who will care for them? The reality is that everyone, even millenials, needs to think about estate planning.
Incapacity. An estate plan involves planning for both death and disability. Anyone, regardless of age, should consider that incapacity could occur at anytime and, without the appropriate documents, loved ones would be without access to medical records or control over medical treatment. An advance medical directive (or a similar state-specific document) may designate your wishes in the event of a terminal condition or permanent vegetative state, as well as appoint an individual who will make health care decisions for you if you cannot make them yourself. Also, without an advance medical directive in place, a non-spouse partner or, if none, a parent or other family member may not be informed, let alone have the ability to make decisions for you, in the event of a medical emergency.
Digital Assets. In the age of social media, smartphones, cloud storage, and a general push toward paper reduction, digital assets (e.g., email, photos, social media accounts, text messages, and cloud files) are central to millennial life. Accordingly, special attention needs to be paid to access and management of these assets in the event of death or incapacity. A growing number of states have passed statutes that pertain to a fiduciary’s ability to access digital assets, which provide for the designation of a person under a durable power attorney or will who may have access to and control of digital assets. Even without these documents, many account carriers allow you to name a survivor or other individual who may have control over or limited access to your account in the event of death or incapacity.
Pets. While naming a guardian for a child is a common incentive for many parents to execute an estate plan, it may be less likely for pet owners to consider that an estate plan may designate what happens to a pet when they pass. With millennials having children later in life, pet ownership among the generation is fairly commonplace, thus plans for care of beloved pets is an important reason to consider an estate plan. At a minimum, a pet owner should consider designating who will care for or adopt the pet and, depending on state law, funds also may be set aside for care of the pet.
Access to and Distribution of Assets. For unmarried couples, in the absence of a durable financial power of attorney, a long-term partner may not have any rights to access property of a disabled partner and, in the absence of a will, state intestacy statutes will not protect property rights of partners as they do spouses. Under a durable financial power of attorney, a designated agent may have access to and control over individually owned assets during the owner’s incapacity which, among other powers, may enable an individual to continue to pay a mortgage or rent on behalf of an incapacitated partner. By executing a will, a partner, regardless of marital status may be the designated beneficiary of assets, whereas state intestacy status may only give survivorship rights to a spouse by marriage.
Asset Titling and Beneficiary Designations. Appropriate asset titling and beneficiary designations also may ensure that unmarried partners have continued rights over property of an incapacitated or deceased partner. With respect to bank accounts, if titled as joint accounts with rights of survivorship, a partner will have continued access to the account, which also will pass to the survivor by operation of law. Alternatively, a pay-on-death form or transfer-on-death form (for bank accounts), or beneficiary designation form (for retirement accounts or life insurance) also may be signed which designates how an asset will be paid when the account holder or owner passes. Some states also permit real property to pass at an owner’s death according to a transfer on death deed recorded during the owner’s lifetime.
A millennial’s lifestyle may not appear to necessitate an estate plan, yet when considering the absence of statutory protection for unmarried couples and the types of assets that millennials often hold, an estate plan is just as (if not more) important than for previous generations.