Various estate planning surveys have showed that there is a significant disconnect when it comes to most people’s understanding of estate planning for millennials. Out of the people that have been interviewed so far many believe that it is important to have estate plans while only a few have them.
Millennials are missing out on estate planning and the reasons given are not good enough for delaying such important processes in their lives. The process of documentation and the resources that go into estate planning are some key reasons why this generation finds it daunting to follow up such a process.
Some of the research that has gone into finding out why estate planning for millennials is not where it should be also indicate that most of them would prefer if there was a way of doing this online so as to avoid the tedious process.
Millennials fail to understand that estate planning is a very crucial step especially in securing their financial future especially now that many people are moving away from retirement plans and pensions.
Types of Estate planning
Below are the different types of estate planning:
- Power of appointment
- Power of attorney
- Property ownership
- Trusts and wills
Importance of Estate Planning for Millennials
Lack of proper estate planning for millennials can leave loved ones in a state of confusion because of being unable to decide on matters to do with the division of property, children’s custody, among others. The following are some of the reasons estate planning for millennials and others is important:
- Estate planning is crucial and necessary especially in reducing taxes and other acquisition expenses especially after one dies.
- Estate planning for millennials is a way of providing for one’s immediate family. This is especially in a situation especially where spouses and children are involved. This secures the financial security of the spouse and names the guardian of the children left behind.
- It is also critical to plan for your estate because your property reaches your beneficiaries quickly than if the millennial does not have an estate plan.
- Through estate planning, you are able to plan for any incapacity, mental or physical
- Estate planning minimizes expenses especially when property is being transferred to beneficiaries.
- Through estate planning, you are also able to choose competent executors of your estate which is a step not only towards saving money but also ensuring the burden is reduced for the beneficiaries of your property
- During estate planning, you can also plan for your funeral arrangements which would lift the burden of your family members and minimize expenses during your burial
- Estate planning is also important as it enables successful succession of your business. This means that your employees do not lose their jobs and the affairs of your business continue running smoothly.
Tips for Effective Estate Planning
When planning your estate, there are several key elements which can be useful in ensuring that you maximize the benefits to your beneficiaries. They are:
- Making specific declarations when dividing your property. This will ensure that the actual beneficiaries are able to acquire the estate which rightfully belongs to them.
- Ensure that the executor of the property commits to following through the plan for spending for example in situations when the millennial leaves their property to a charity or a trust.
- When planning for your estate, ensure that you are knowledgeable on the subject matter. Therefore ensure that you work with a team of experts who will give you advice on how to best plan.
- List all your valuable assets and investments in order to simplify the administering process
Reasons why Estate Planning is not a Priority for Millennials
The following are some of the reasons why millennials are not very keen on estate planning:
- They are uncomfortable telling personal details to people they consider total strangers. They feel that they do not want to disclose their investments and assets to people they are not familiar with
- Most millennials feel that they are not ready to make such decisions in their lives as they are considered ‘important life decisions’.
- Millennials are not informed about the importance of estate planning. Most of them are ignorant and are not ready to take a step towards informing themselves. This not only costs them money in the long run but also their family’s money as well.
- Many people avoid estate planning because they are not interested in dealing with family issues. This kind of matters stir up a lot of family conflicts and most people tend to avoid that.
- Some millennials also do not prioritize estate planning because they do not have the resources to cater for attorney fees and other costs that come with estate planning.
Some millennials also claim to be too busy with the lives they are leading presently to be able to find an opportunity to plan for their estates.
