One of the biggest misconceptions associated with estate planning is that it is only meant for aging adults. And this is borne out in the data that shows only one in five millennials in the US have an estate plan in place.
Contrary to what many young people think, estate planning is not meant for older people alone. In fact, experts say that as soon as you are independent and start earning, you should have an estate plan in place and update it as and when your goals change.
Why Is Estate Planning Important for Millennials?
The Threshold for Probate in California Is Very Low
Under California law, if the value of your estate is equal to or more than $100,000, it must go through probate – in the absence of an estate plan. If you own a home anywhere in California, the combined value of your home and other assets (jewelry, furniture, savings, and so on) can easily cross the threshold for probate.
In the unfortunate event that you die without an estate plan, your loved ones might not only have to spend a significant amount of money on probate but might also have to wait several months to inherit your assets.
Millennials Stand to Inherit a Significant Amount of Wealth
It is well known that baby boomers are the wealthiest generation in the nation’s history. As they grow older, they are all set to pass on their assets to their millennial sons and daughters in what experts call the ‘great transfer of wealth’.
By 2030, millennials stand to inherit as much as $68 trillion from their boomer parents. It is a staggering amount of wealth – to put it mildly. This is the most important reason why experts say that millennials should think about what to do with the wealth they stand to inherit from their parents.
If you belong to the aforementioned category and stand to inherit a substantial amount of assets from your parents, you need to have a plan to manage it, protect it, and eventually pass it on to your loved ones.
An Estate Plan Is Not Just about Your Assets
If you have young children, it is extremely important to think about who will raise them and care for them if something were to happen to you and your spouse. It is even more important if you are a single parent with young children. By creating an estate plan, you can designate a trustworthy person as the guardian of your children.
In the absence of an estate plan, the court will be forced to step in after your death and designate a guardian for your children. The problem is that the person chosen by the court might not be someone you would have wanted to take care of your children. This is one of the biggest reasons why parents with minor children should have an estate plan in place.
If you have pets that you are extremely fond of, you can name a guardian for your furry friends as well.
An Estate Plan Can Protect Your Digital Assets
If you own cryptocurrencies, domain names, Venmo and PayPal accounts, and other valuable digital assets, you need to have an estate plan in place to make sure your loved ones are able to inherit them after your death.
Also, if you have a large amount of photos, videos, songs, movies, and e-books stored on the cloud, you need to make sure your loved ones can access it after your death. The same rule applies to your social media accounts as well.
Advantages for Young Adults in California to Have an Estate Plan
There are several reasons why young adults may want to consider creating an estate plan:
- You can make sure your assets go to your partner if you aren’t married to them.
- You can grant powers of attorney to a trustworthy friend or family member to take over if you become unable to speak for yourself or pass away.
- You can take stock of all your assets, such as jewelry, car, family heirlooms, and others.
- Setting up your assets as part of a living trust can save your family and other heirs the hassle and expense of going through probate.
You should definitely create an estate plan if you have a child. This is to make sure they are financially secure. This will also let you name a future guardian. It will be up to the court to decide guardianship if you and the other biological parent pass away or become incapacitated without writing out the wishes in an official document.
In fact, many young adults do this for their pets too. The person the court decides as the guardian may not necessarily have the same parenting style or personal values as you. So, you can be in control of these decisions with thoughtful estate planning.
You Need to Plan for Incapacity
You are never too young to think about who would make financial and healthcare decisions on your behalf if you are incapacitated due to an injury, infection, or illness. An estate plan allows you to designate someone who can handle your finances and investments (commonly referred to as a durable power of attorney) and someone who can make medical and healthcare decisions on your behalf (commonly referred to as an advance healthcare directive).
In the absence of an incapacitation plan, your family members might quarrel among each other as to who should make decisions on your behalf in the event of your incapacity.
Experienced Estate Planning Attorneys in La Mesa, California
If you are thinking about creating an estate plan, now is the right time to act. The skilled estate planning attorneys at Garmo & Garmo have extensive knowledge of California estate planning laws and have more than 80 years of combined experience. We can create a plan which is customized to your needs and goals and meets the highest legal standards.
To discuss your estate planning needs with a seasoned California estate planning attorney, call our firm today at 619-441-2500 or contact us online and schedule a free consultation.