Estate Planning Tips for Millennials
Estate planning is the process planning for the use of assets during lifetime and the disposition of assets at death. Estate planning is not only important for the elderly, but should start as early as possible. Many millennials think that they are too young to plan their estate, but this isn’t the case. Its better to address these issues early than leave family members in a dire situation. Certain key concerns should be considered including but not limited to: providing for the care of spouses and children during lifetime and in the event of death, divorce, business startup and/or business failure. The millennial individual must consider estate planning as early on as possible so that they can plan their financial affairs throughout their lifetime.
Another consideration for estate planning is tax-planning advantages for married couples. Marital planning allows for more assets to pass to younger generations tax-free. Divorce is another aspect that the millennial individual doesn’t often think about. With the high divorce rate, as much as fifty (50%) of assets may be taken by a spouse in a divorce.
If you intend on having children or already have children, it is also important to consider the actual costs of raising children in relation to your estate planning and/or retirement goals. You may also want to pay for children’s schooling and/or college and that may require putting funds away early one. If you have young children, you should consider appointing guardians in the event of your incapacity or death so that your children do not have to go into the court system to determine custody. Also, having guardianship designations keeps grandparents and other family members from fighting over the custody of your children.
Another consideration for the millennial is where you want to live now and where you want to live in the future. Planning early on allows for a millennial individual to have the money available in order to fulfill their goals with respect to lifestyles. Also, any homes purchased should be purchased in tenants by the entirety. The reason for this is both creditor protection and probate avoidance.
Business ventures pose their own risks to millennial individuals. Businesses can be very rewarding but can also deplete a person’s nest egg if business does not go well. Proper business planning and investing can provide some safeguard in the event of a business failure. The business should further have some asset protection and not be owned in your personal name. Further, businesses owned by partners are equally at risk of failure due to differences of management opinions. It is smart to diversify your assets and/or businesses. If one investment goes bad, you will have plenty of time to get back on the horse with new investments.
In conclusion, not only does the millennial have to consider basic estate planning, but they also have to consider many other issues that will assist you in building your nest egg as you reach retirement age.
Contact Capital Planning Law, PLLC for your complimentary consultation to discuss your estate planning, business law, probate, guardianship and/or real estate needs.