Estate Planning for Millennials
When people find out that I’m an orange county estate planning attorney, most people’s eyes glaze over immediately. At best, they respond with something to the effect of “you work with rich people.” I agree, there is nothing sexy about estate planning. However, estate planning is not just for old rich people. In fact, estate planning for millennials can be just as important as it is for “old rich” people (however you define “old” and “rich”). Often times, the people hurt most by a lack of estate planning are millennials. Estate planning for millennials is not a one size fits all approach. However, if you answer yes to either question below, you should seriously consider some level of estate planning:
1) Do you have young children (anyone under 18)?
2) Do you own a home?
If you have answered yes to either of these questions, you need some form of estate planning. Here’s why:
Estate Planning for Millennials with Young Children
Let’s assume you pass away unexpectedly. What will happen to your children? Where will they go? Who will take care of them? Who becomes their new parent? Will they be split up? Assuming there are two parents, the remaining parent will take on all of these roles. But what happens if something were to happen to both of you? Scary? Yes. But that’s more reason to plan for those issues, not less. As a young parent, often times if something tragic were to happen, there is a decent chance it may happen to you and the other parent. Do you trust that your respective families could figure it all out without a fight? Especially if money is involved? Do you want the same person that is taking care of your children to also control your money, including life insurance proceeds? Every family is different, but more often than not, the families don’t agree on all of these issues. And when that happens, the people that suffer the most are your children.
Even if you don’t have significant assets, you should speak to an attorney to assist you with drafting estate planning documents, including a will, durable power of attorney for finances and an advance health care directive, to make sure your children are cared for if you become incapacitated or pass away.
No Kids for this Millennial, Just a House
So kids are not in the cards for you. You don’t have a worry in the world, no one to answer to and nothing but open roads in front of you (I’ve been there). Why do you need to worry about estate planning? One word: Probate. Probate is a necessary evil in our court system. In short, probate is the court supervised process of distributing your assets after you die. If you die without any type of estate planning, the court is going to divide up your house and any other assets between your parents or siblings. Even assuming that California’s default plan is satisfactory to you, your family will not receive those assets for likely more than a year. And before they do, the court, the bond company, the probate referee (appraiser) and the attorneys get their cut. To make matters worse, most of the fees are based off of the gross value of your estate, not the net value. In other words, assuming you own a home that could be sold for $500,000, but you owe $450,000, the fees will be based off of the $500,000 value. This could mean that your family decides it’s not worth the cost, and the house may end up in foreclosure.
If you own a home in Orange County and you don’t have some form of estate planning, your family will find themselves in probate. While Modern Wealth Law is more than capable of guiding your family through the probate process, it is one of the most frustrating situations for the family. However, for a fraction of the cost of probate, you could set up an estate plan that will save your family a lot time, money and headaches by avoiding probate.
If you have answered yes to either of the questions above, give us a call at (949) 371-5003 or contact Modern Wealth Law by email, and an Orange County Estate Planning Attorney will discuss with you some basic estate planning options that will fit your needs.
John Wong advises on all aspects of estate planning, probate, asset protection and trust administration. He believes that estate planning is about planning for life; while having protections in place should the unexpected occur.
