Financial Tips for Millennials: Estate Planning

For those under the age of 40, planning an estate may seem like a far-off matter. However, all adults, regardless of age, need to have a plan in place for what will happen after they eventually pass. While many who draft an estate, plan are already heading towards the golden years, Millennials can get ahead of the game by laying out their own plans now. The future is unpredictable, but by getting your finances together now and setting out a detailed plan, you can help make life a little easier for your loved ones down the road. 

Provide for Your Family's Financial Well-Being 

Part of estate planning is making sure your money goes to family members who need it when you pass. For example, if you have young children, consider what their needs would be in a world without you, and write up your plan to provide for their financial well-being. Other issues to consider in this area include: 
 

• Choosing guardians for your children 

• Deciding who will make financial choices for aging parents, if applicable 

Choose Bank Account Beneficiaries 

There’s a good chance that you’ll have several bank accounts by the time you retire, including, quite possibly, retirement accounts, IRAs, 401(k)s, and so on. While you might think that all accounts are automatically transferred based on whatever you write in your will, this is not necessarily the case for all types of accounts. Your retirement account, for example, can have a named beneficiary to whom the account will go when you pass. These are called transfer-on-death assets, or TOD assets, and usually, only require some paperwork to designate. 

Take Your Marriage or Partnership Into Consideration 

One final consideration to keep in mind as you begin drafting your estate plan is how you will write in your spouse or partner if you're married or in a committed relationship. For instance, unless you have a pre-nuptial agreement specifying otherwise, your spouse will, in many cases, have some inheritance rights. If you're not married but want to get similar protections for your partner and yourself, you can write these provisions directly into your estate plan. For instance, you can specify that your partner will have the right to make health decisions for you towards the end of your life. 
 

Even though setting up an estate plan might not be at the forefront of many Millennials' minds, getting started with estate planning and financial organization sooner rather than later has countless advantages. The best time to start planning is while you're young, so if you fall in the group of people born in the late 20th century who are currently in their 20s and 30s, now is the time to start thinking about your own estate planning and getting your financial ducks in a row.