There’s no doubt that rapid advances in technology, social and political tensions, and the shift in trends of social media and digital workforces through the pandemic have not only changed the way we work and live through a production lens but have also shined a light on the beginnings of a massive shift of generations in the workforce. With Baby Boomers retiring and Millennials and Gen Z continuing to enter the workforce, the change in wealth accumulation is evident, and the reality of estate planning for the younger generation begins to emerge.
As a Millennial myself, who has only been in the workforce for a short period, long-term financial planning has not been a pressing consideration for me, and my considerations (not unlike many Millennials, I presume) do not go beyond a savings account and making contributions to a 401(k). However, as a Millennial and as an estate planning attorney, I have come to realize a couple of things:(1) Millennials need to start thinking more about their personal estate plans as they continue to accumulate assets, including property, investments, and personal belongings; and (2) as we continue to enter into the “Sandwich Generation” of caring for our children while also caring for our parents, we need to initiate the estate planning conversation with our parents to ensure we are aware of their potential financial needs and liabilities so we can prepare.
As the oldest Millennials enter their early 40s and the youngest reach their late 20s, they have begun to age into the “Sandwich Generation,” characterized by busy lives full of work, marriage, parenthood, and tending to retiring parents. Oftentimes, such daily chaos leads to neglect of long-term estate and financial planning – conversations that are usually postponed until the occurrence of a health scare or disability among their elders. Ultimately, this means such talks come far too late. We have compiled a few straightforward answers to some commonly asked questions for Millennials.
It’s important to start thinking about estate planning in the early stages of our professional lives, rather than delaying it. To help Millennials, here are some straightforward answers to commonly asked questions about the value of having our affairs in order.
I have very limited assets – why would it be worth having an estate plan now?
A person’s need for an estate plan is not (solely) driven by their wealth, but also by your status as an adult. Even if you do not consider yourself to have “wealth,” every individual should have three essential documents done: (i) Will; (ii) Financial Power of Attorney; (iii) Health Care Directive/Health Care Power of Attorney. The Will appoints an individual to take control of your assets and distribute them to whom you decide (i.e., your car, personal items, financial assets, etc.). The Financial Power of Attorney and Health Care Directive allows you to nominate an individual to handle your financial affairs and health care decisions when you are unable to do so, which may eliminate the necessity for a court-appointed guardian and/or conservator.
Millennials have also grown up in the age of technology and digital assets, which means we need to consider these aspects of our lives when planning for the future. This includes creating a plan for our digital assets, such as social medial accounts, online bank accounts, and cryptocurrency.
Why would I make a plan now if things are just going to change as I get older?
Every individual’s plan is unique to them, and you will likely experience significant life changing events that will require modification to your estate plan. This applies to all individuals, not just Millennials just starting out. However, prior to any significant life changes, not having a plan in place for your current situation could cause problems in the event of incapacity or death.
Is it expensive?
There is a fee involved in preparing an estate plan, but it is an investment to protect your legacy and your family.
How do I have this conversation with my parents?
Not only should Millennials be thinking about their estate plans, but they should be having conversations with their parents who are likely of the Baby Boomer Generation to ensure not only their financial well-being but become prepared to act in the event or a parent’s incapacity or death. These may be difficult conversations to start, but Millennials can pick up on cues, phrases, and events to engage their parents in these conversations. For instance, parents of Millennials are likely experiencing the settling and administration of their own parents’ estates and likely hear about their parent’s experiences, complaints, and headaches. This is a great opportunity to discuss with your parents the importance of their estate plan, such as “I know how difficult it was for you to handle grandma’s estate, but it just made me think if you and dad have your plan in place?” Other events or topics of conversation can generate good opportunities for discussion about estate planning with parents of Millennials such as divorce, the death of another family member, or changes in the mental incapacity of family members. Discussion of these everyday life events can lead to productive conversation and action.
The bottom line, regardless of generation the sooner you start planning, the better, and we at Eckberg Lammers, P.C. can help guide each generation in the right direction.