By the time you reach your thirties, it’s likely you’ve accumulated some assets—maybe a home, a car, a savings account and some cryptocurrency. However, if you are like most millennials, even though you know you should have a will, you probably don’t. A recent article, “5 Reasons Estate Planning Is So Important” from The Baltic Times, reports a staggering 68% of millennials don’t have will or an estate plan. If you own anything, you need an estate plan. Here’s why.
A kindness to your family. A family can have great relationships. However, when someone dies and everyone thinks they have a right to the estate, fights can begin. Even if you’ve shared holidays throughout your lives, a court battle will put an end to your traditions. If there are divorced members of the family, it can become even more complicated.
An estate plan can prevent these disputes before they begin. It gives you time to discuss your plans with beneficiaries. If you have difficult family members, you may want to have a conversation in your estate planning attorney’s office. The presence of an estate planning attorney often puts family members on notice: you’re serious about this and are not going to be manipulated.
Protection for beneficiaries. Not everyone wants their immediate family to be their beneficiaries. Let’s say someone is separated but not divorced. They want to be sure their children or other family members inherit. However, without a will, the spouse will still be first in line from a next-of-kin standpoint. An estate plan directs who you want to get your property.
There are other documents in estate plans, including trusts, to further protect assets. A trust can allow you to leave property for minor children in a trust and determine exactly when you want them to receive the assets. That may be over their lifetimes, or when they reach certain milestones.
Minimize taxes for the estate and beneficiaries. Certain states have estate taxes and inheritance taxes. Even if the value of your estate doesn’t reach current federal estate tax exemption levels ($12.06 million for individuals in 2022), there may be other estate taxes you could avoid or minimize through estate planning.
Intestacy statute law. If you don’t have a will, the state has one for you, but you may not like it. Each state has what’s called “intestacy” statutes which direct how estates should be distributed when people don’t have wills. If you didn’t want your immediate family to inherit your property, it won’t matter if you don’t have a will. The partner or close friend who may be your family of choice won’t have any ability to challenge the law.
Peace of mind for you and your loved ones. Creating an estate plan establishes a legally enforceable blueprint of what you want to happen to your assets. If you have minor children, an estate plan is used to name the guardian you want to raise your children. Your estate plan also names who you want to make decisions for you if you become incapacitated through a Power of Attorney, and who may make healthcare decisions for you—Health Care Power of Attorney.
Once you have your estate plan done, you’ll find a worry you didn’t even know you had has lifted. You’ve done the right thing to protect yourself and your loved ones. It’s a good feeling to know that you’ve taken care of those you love.
Reference: The Baltic Times (Sep. 29, 2022) “5 Reasons Estate Planning Is So Important”