While studies show six out of every 10 American adults do not have an estate plan in place, the news is more alarming for millennials. The American Association of Retired Persons (AARP) says 78% of millennials lack basic strategies, such as a will or living trust.
Too many people think drafting a will is only for wealthy people, but estate plans provide benefits and peace of mind to anyone, regardless of their net worth, age or marital status. Still, too many people think it’s something to put off to a later date.
How can estate planning help younger adults?
People of all ages who take the time to draft a will or other estate planning documents understand it’s part of sound financial planning for all stages of their lives. The benefits include:
- Planning for your own needs: One of the most critical aspects of an estate plan is deciding who will make decisions for you if you become too ill or injured to make those decisions for yourself. A durable power of attorney handles financial and legal matters, and a health care proxy will make medical decisions, while a living will establishes your wishes for end-of-life medical care.
- Transferring wealth: A will is the most basic estate planning document, which names an executor who is responsible for distributing your possessions according to your wishes after you die. If you have young children, naming a guardian to oversee their care is an essential step. Adding a revocable trust or personal property memorandum can also be helpful additions.
- Tax benefits: Estate planning also helps you maximize your assets that will be given away to loved ones and other beneficiaries. The 2017 tax law increased the amount people can give away without triggering transfer taxes. Annual tax-free gifts up to $15,000 ($30,000 for couples) are also allowed. Additionally, educational and medical expenses can be paid for someone else without gift taxes.
Protect your family’s future well-being
Estate planning is a vital tool in protecting your family’s financial future and preserving it for generations to come. Yes, it can appear to be overwhelming at first. However, an experienced estate planning attorney here in New York can answer your questions and help you find the best plan to fit the needs of you and your family.