The Millennial's Guide to Estate Planning

When you hear “estate planning,” do you picture wealthy retirees, complicated trusts, and a filing cabinet full of legal documents? You are not alone. Many millennials assume estate planning is something to think about later - after buying a home, having kids, building significant wealth, or reaching retirement age. But estate planning is not only for the wealthy or elderly. It is for anyone who wants a say in what happens to their belongings, finances, healthcare, and loved ones if they become unable to make decisions or pass away. If you own a car, have a bank account, contribute to a 401(k), own a house, have children, or share your home with a pet, you already have an “estate.” It may not be a mansion or a multimillion-dollar portfolio, but that doesn't matter. Your estate is simply the property, accounts, responsibilities, and personal relationships that make up your life. A basic Ohio estate plan can give you clarity and help your family avoid unnecessary confusion during an already difficult time.

Estate planning is about more than money

A will is important, but estate planning is not just about deciding who receives your possessions. It also allows you to plan for situations that can happen during your lifetime. For example:

• Who can speak with doctors if you are unconscious?
• Who can pay your bills if you are unable to?
• Who should care for your children?
• Who will care for your dog, cat, or other pet?
• How should someone access your online accounts and digital photographs?
• What are your wishes regarding end of life treatment?

These are not “someday” questions. Accidents, illnesses, and unexpected events can affect people at any age. Planning ahead is not being dramatic, it is preparing for your major life events.

Turning 18 changes your parents’ legal authority

One of the most important estate-planning milestones is your 18th birthday. Before you turn 18, your parents generally have legal authority to make many medical and financial decisions for you. Once you become an adult, that authority does not automatically continue. If you are in an accident or become unable to communicate, your parents may not automatically be able to access your accounts, manage your finances, or make healthcare decisions for you.

That is why we created our Young Adulting package for people ages 18 to 25. It includes the essential healthcare and financial powers of attorney young adults need to begin adulthood with greater protection and peace of mind, as well as a Will. This planning can be especially valuable for college students, young adults living independently, and anyone who wants a trusted person to step in if needed. It can also spare your family from having to ask a court for a guardianship.

The four core documents many millennials need

Estate plans are personal, and your plan may eventually include additional documents. However, four foundational documents are often a good place to begin.

1. Last Will and Testament

Your Last Will and Testament explains how you want certain assets handled after your death. It can also nominate a guardian for minor children and identify the person you want to manage your estate. In Ohio, a will generally must be:

• Created by someone who is at least 18 and of sound mind
• In writing
• Signed by the person making the will
• Witnessed and signed by two competent adults

A will can be especially important if you have children. Without clear instructions, a court may need to determine who should care for them. If you're a parent, then you should be making that decision, and you can with a will. A will may also help your loved ones understand your intentions regarding personal belongings, charitable gifts, and other property.

2. Durable Financial Power of Attorney

A Durable Financial Power of Attorney allows you to name someone to manage financial and legal matters on your behalf if you cannot do so yourself.

Depending on the authority you grant, your agent may be able to:

• Pay your bills
• Manage bank accounts
• Handle insurance matters
• Deal with government agencies
• Manage real estate
• Take care of other financial responsibilities

“Durable” means the power generally remains effective even if you become incapacitated. You choose the person who will have this authority while you are able to make your own decision. That is much better than leaving your family to seek court involvement later.

3. Healthcare Power of Attorney

A Healthcare Power of Attorney names someone to make medical decisions for you if you are unable to make or communicate those decisions yourself. Your healthcare agent may communicate with your medical providers and help make decisions based on your known wishes, values, and instructions. This document can be particularly important if you are hospitalized, seriously injured, or experiencing a medical condition that affects your ability to communicate. This document does not allow your Agent to overrule your wishes if you are competent and able to communicate your wishes.

4. Living Will

A Living Will communicates your wishes about your end of life care, specifically when you are in a terminal or permanently unconscious state. This document is very important, because when it comes to end of life care, especially the cessation of food and water, these are incredibly difficult decisions for your loved ones. By creating a Living Will, your loved ones only have to respect your wishes, they don't have to decide whether to pull the plug on someone they love. This is one of your final acts of kindness to those who love you.

A Healthcare Power of Attorney and Living Will serve different purposes. One names a decision-maker; the other communicates your wishes about specific end-of-life treatment circumstances. People benefit from having both.

Do not forget beneficiary designations

While a Will does not avoid probate, assets such as the following may pass directly to the named beneficiary if properly designated:

• 401(k)s and other retirement accounts
• Life insurance policies
• Bank accounts with payable-on-death designations
• Real estate
• Financial accounts

In many cases, the beneficiary designation controls, even if your will says something different. For example, if your 401(k) names a former partner, your will may not change that designation. If you get married, have a child, divorce, or lose a named beneficiary, review your forms with the account provider and your attorney to coordinate them with your overall estate plan.

Your digital life needs a plan, too

Your digital assets may be some of the most meaningful things you own, even if they do not have a traditional dollar value. Think about:

• Family photographs stored in the cloud
• Social media accounts
• Email accounts
• Online banking
• Digital subscriptions
• Cryptocurrency and digital wallets
• Files stored on your computer or phone
• Online businesses or creative work

Without planning, your loved ones may not know what accounts exist or how to request access. Some companies have strict privacy policies and terms of service that can make access difficult. A complete estate plan can include instructions for identifying your digital assets and naming someone to manage them. Do not place passwords directly in your will, since a will may become part of the public probate record. Instead, consider using a secure password manager or separate inventory, and make sure your trusted person knows how to locate it.

Keep your first estate plan simple

Your estate plan does not have to be complicated to be useful. Many millennials can begin with a straightforward plan that includes a Will, Financial Power of Attorney, Healthcare Power of Attorney, and Living Will.

You may also want to consider:

• Guardianship instructions for minor children
• Pet-care planning
• A plan for personal belongings
• Digital-asset instructions
• Beneficiary-designation coordination
• A Revocable Living Trust

We generally recommend reviewing your estate plan every three to five years, as well as after major life changes. These may include:

• Marriage or divorce
• The birth or adoption of a child
• Buying or selling a home
• Starting a business
• Receiving an inheritance
• A significant change in finances
• The death or incapacity of someone named in your plan
• Moving to another state

Life changes quickly. Your estate plan should keep up.

Start where you are

You do not need to have everything figured out before making an appointment. You do not need a large estate, a perfect budget, or a detailed list of every possession.

You simply need to begin.

At the Law Offices of Laura Blumenstiel, we help individuals and families throughout Ohio create personalized estate plans in a warm, educational environment. We offer both virtual and in-person meetings, and payment plans may be available to help make planning more accessible. We are happy to meet you where you are - whether you are creating your first Will, starting our Young Adulting package, planning for children, or updating an older estate plan. You can contact us to schedule a conversation and learn what type of planning may fit your needs.

Disclaimer: This blog post provides general information about Ohio estate planning and is not legal advice. Laws and individual circumstances vary. An attorney should review your specific situation before you create or sign legal documents.