No one wants to think about or plan for their own death, and it is especially difficult for young people to plan for something that feels so far away. Many millennials do not feel the need to estate plan because they are young, legally unattached, and childless, and would rather spend their money on things that can benefit them in the here and now. Not only is this type of thinking incorrect, but it can also create major problems in the event of an unexpected death or incapacity. Here are three common misconceptions millennials have about wills that should be resolved:
Misconception #1: “Estate planning is a problem for my fifties.”
Many millennials believe they do not have to worry about estate planning until they are approaching middle age. This is especially true for unmarried, childless millennials without any direct heirs. However, most single millennials still have cars, apartments, bank accounts, pets, and virtual assets (social media accounts, iTunes, etc.) that will need to be taken care of one way or another. Wouldn’t it be nice to leave these valued possessions to someone you love and trust?
For married millennials, the situation can be more serious. Many young couples have separate bank accounts and have chosen not to retitle bank accounts into their joint names. In this situation, without a power of attorney to allow a spouse to act on the other’s behalf in financial situations, accessing separate bank accounts and other tasks like paying bills become difficult when most of the assets are in the name of the person who dies or becomes unable to act on their own.
Misconception #2: “My family will take care of it.”
A will is not just for you, it is also for your family. Some millennials assume that without a last will and testament, belongings will be left to their parents. While this is usually true, their parents will still have to go through probate, which they shouldn’t have to worry about during such a difficult time. Many millennials also do not realize the number of tasks and decisions their families face in the event of their death or incapacity, such as funerary arrangements, the location and inheritance of assets, and how to handle social media accounts.
It is also important for millennials to remember that student loan debt, credit card debt and other financial obligations do not disappear when a person dies. Therefore, family members can be directly responsible to repay this debt if they co-signed a loan or were named on a joint bank account. Luckily, an estate plan can lessen the negative impact that financial debt can have on one’s family.
Misconception #3: “Last wills and testaments are set in stone.”
Millennials forget that wills are not final until we die, and as a result, are reluctant to make important decisions based on factors that will probably change. Last wills and testaments are meant to reflect our values, and can be revised and updated as these values, feelings, and family relationships evolve.