I am often told by millennials, “I don’t need a will.” Almost 80% of Americans under the age of 36 do not have a will, according to a Caring.com study. The most common reasons I hear are “I don’t have anything” and “I am too young to need a will.”
Everyone needs a will, no matter how much you have. Our mental balance sheet of our assets can be somewhat skewed. When I first sit down with new clients, and we begin to discuss what they own, we usually discover some assets along the way. Maybe they have an employer-sponsored retirement or life insurance benefit or, perhaps, a savings account opened at a local bank. Without a will, we give up our ability to control who gets the assets we leave behind. A will is not just about handling what you may own, but also about handling what you may owe or be owed if you pass away. A good will outlines your beneficiaries and the representative of your estate, commonly called your executor. Many millennials may not realize that not all student loan debts are forgiven upon death. An executor may be needed to handle student loan debt issues. Additionally, if you pass away and you are owed money, a representative usually must be appointed to recover those funds. Without a will, the court will assign a representative to your estate. Without a will this process takes longer, is more expensive, and you do not have the ability to choose who gets what you have or who is in charge of your estate.
Everyone needs a will, no matter how old you are. Unfortunately, we never know when tragedy might strike. Some of the most complex probate cases involve a younger person passing away. When we are young we often have a lot of irons in the fire. Generally, we are less likely to have consolidated our assets, more likely to have higher liabilities (such as a mortgage, student loan debt, or line of credit) and more likely to die leaving minor children. These are all crucial aspects of your life that a will can help plan for.
If nearly 80% of millennials do not have a will, it is likely that just as many—and probably more—do not have a power of attorney in place. Even if you truly do not own anything, you still have something to protect with a power of attorney—yourself! If you are unable to make decisions for yourself, you will need a power of attorney in place for someone to be able to help you. There are two types of powers of attorney: a medical power of attorney and a durable power of attorney. A medical power of attorney allows someone to make medical decisions for you, if you are unable to do so. This document also may include a HIPAA release that would allow your power of attorney to review your medical information in order to make the best decision. A durable power of attorney allows someone to act on your behalf for many financial and legal matters. Depending on your preference, this power of attorney may be used in situations where you are not incapacitated but may just not be able to be present. For example, if you travel often.
Millennials, let’s change this statistic! Let’s plan for our future and the future of our loved ones by getting our estate planning documents in place.