Estate Planning For a Younger Generation

It is not a priority of most young adults to begin planning their estate. Even millennials that are mindful enough to approach a financial advisor are not focused on estate planning. It’s just simply not the place in life to think about a will, medical power of attorney, or a financial power of attorney, in their opinion. But this opinion is incorrect, and the conversation should be broached.
This can be a difficult topic for financial advisors and their millennial clients because the majority of this generation are most likely not working with an estate planner. They’ve never really considered this since they’re in the prime of their life, and most likely no one has pointed out the importance of estate planning.
Another challenge to approach with young clients as far as estate planning goes—they may not yet have enough assets to need protection provided by estate planning. This is similar to why it’s so difficult to get young adults in their 20’s begin their 401(k)—this generation is under the impression that retirement is still so far away.
Health Care
To compliment estate planning for young adults, they should also prepare for the possibility of health care issues down the road. Parents of children that are over the age of 18 no longer have any automatic rights or access to their child’s medical records or to make legal and financial decisions on the child’s behalf should they become incapacitated.
Any adult over the age of 18 should obtain, at the minimum, a health care proxy and a signed living will. This varies from state to state, but they should also designate someone to act under the durable power of attorney on their behalf—usually a parent or both parents.
Also, it’s possible that young adults may not need a will until after marriage or after they have children.After these young adults have children, a will is necessary to designate a guardian for any minors. Young adults may also wish to begin the conversation with their parents to discuss how the parent’s estate plan may impact them.
Preparing for the Future
It is a financial advisor’s responsibility to help younger clients prepare for life and bridge that gap between the present and the future. Ask them to envision how their life will look 40 years from now, get them to begin thinking about the importance of a will. Consideration should also be given to long term care insurance, so they’re not a burden to their children when they’re adults.
Accidents do, and can happen. It’s important to make sure that your clients—young and old alike—are prepared for it if the situation arises. Many young adults believe that if they’re young and don’t have a lot of money, they don’t need to have an estate plan, and that is simply not true.