Estate planning is something that many people believe to be a task for their later years in life, but it actually is a way to ensure that your assets are properly managed while you are living and after you pass on. Despite the common misconception that estate planning is only intended for the rich and the elderly, millennials stand to benefit a great deal from taking this proactive approach to managing what they’ve worked hard to accumulate!
This is especially true in Florida, a state where the average cost of living a month is $4,224 per person; to afford a home, it’s recommended Floridians need to have upwards of $100,000 in annual income. The financial challenges that Florida millennials (and millennials everywhere) are facing are extreme, making estate planning that much more of a necessity.
In this day and age, you need more than just a budget! You need a plan that accounts for your financial welfare both now and in the future.
If you wish to make sure that your new home, vehicle, and all other hard-earned assets are kept safe and your wishes both clarified and honored, it is never too early to create an estate plan. In addition to securing your finances, an estate plan can also help you address your preferences for medical care and designate a legal guardian for your children, should you ever become incapacitated or pass away.
Understanding Estate Planning Basics
In order to craft a thorough and effective estate plan, you need to first understand the basics. There are a variety of legal tools that can be utilized in your estate plan, but the main categories of documents you need consist of the following:
Will – This is a legal document that clarifies your wishes regarding the distribution of your property and the care of any minor children. The presence of a will alone will not guarantee that your loved ones can avoid the probate process, but the absence of one will most likely mean your property and other assets will end up in the wrong hands.
Living will – Living wills, also known as advanced directives, are written instructions that outline your medical preferences if you were to ever be unable to make that decision for yourself. For example, if you were to be involved in an accident that resulted in a coma, your living will could specify whether you’d prefer to remain on life support or not.
Power of attorney (POA) – This is a legal document that allows someone to act on your behalf. They can have a wide scope of authority or minimal authority over legal and financial matters in the event that you became incapacitated.
Healthcare proxy – This is similar to POA as it allows someone to act on your behalf when it comes to your healthcare. Naming a healthcare proxy can help ensure you get the care you need, when you need it.
Beneficiary designations – This is the act of naming someone (or several people) who’ll inherit your assets upon your passing. If you fail to name beneficiaries, the state will decide what happens to your assets.
Protecting Digital Assets
In a time period that is defined by the evolution of technology and one’s digital footprint, millennials find themselves at the forefront. It shouldn’t come as a surprise that digital assets will need to be accounted for in the estate planning process.
Digital assets are anything that is created and stored digitally. You’ll want to be sure that you’re taking more than just your physical possessions into consideration when you’re creating your estate plan. This includes online bank accounts, social accounts (everyone has a few of those, right?), cryptocurrencies, and much more. Careful inventory should be taken of all of your digital assets, and you should appoint beneficiaries for anything you wish to be inherited.
Planning For The Unexpected
As mentioned briefly above, estate planning is something that tends to get put on the back burner. While your youth and health are wonderful things to have, they aren’t always guaranteed. Unforeseen circumstances can arise at any time and compromise your well-being. That’s why planning for the unexpected is so critical!
In your estate plan, you can address the following things to ensure that the family you leave behind is well taken care of if the unexpected occurs:
- Life insurance – This can serve as a safety net to your family as it will provide them with funding upon an untimely death so that they can take care of medical expenses and more. This is especially helpful in your younger years as the cost of supporting a family is significant, creating an even greater need for the assistance that life insurance can supply.
- Guardianship for children – This is a crucial aspect of estate planning as there is no one who understands your child’s needs or knows them better than you do. While it may be difficult to imagine your children living a life without you in it, it’s likely that you’d prefer to have a say in who would end up raising them if it can’t be you. Designating a guardian in your estate plan keeps the control in your hands, rather than leaving it up to the state of Florida.
Reviewing, Updating & Communicating Your Wishes
Regularly reviewing and updating your estate plan documents will be necessary every couple of years or anytime a major life event takes place. For example, if you get married or divorced, have a child, lose a loved one, or something else, it’s imperative that you keep your estate plan current so it accurately depicts your desires for your assets.
While estate planning can feel like a daunting task, it is never too early to communicate your wishes. The gift of time isn’t always on our side, and taking the time to create an estate plan – though it may be temporarily uncomfortable – can ensure that your family is permanently comfortable if something were to happen to you down the road.
How Elder Law, P.A. Can Help You
Elder Law, P.A., is a law firm dedicated to providing quality legal services to clients of all ages. Our lead attorney, Ryan J. Smollar, has become familiar with the intricate legal terrain that is estate planning, including how the digital age impacts planning and specific legal and financial challenges millennials face. He can help you craft a comprehensive estate plan that secures your financial future and shields your assets and loved ones from jeopardy. Call Elder Law, P.A. today to schedule a free consultation.