You’re Not Too Young for Estate Planning: Steps Every Millennial Should Take Now

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Right now, you’re in the prime of your life. Well, save for a little back pain after an intense game of pickleball, but otherwise, you’re in great physical shape. You’re doing well at work, and you’re building the financial foundation that will help you achieve your life goals, like buying a house, starting a family, and eventually retiring well. Now seems like an odd time to consider estate planning, but it’s actually the perfect time. 

If there’s one thing about life that’s predictable, it’s that it’s unpredictable. That’s why having an estate plan isn’t just for later in life — it’s a smart move now. Even if you don’t need to enact that plan for a long time, starting early can get you thinking about your long-term legacy. You don’t have to do everything at once, but there are key steps you should take today. 

Set Up a Will 

You probably think of wills as the plot device used in mystery novels or whodunnit thrillers. But beyond the drama, a will is an essential legal tool to ensure your wishes are followed should anything happen to you. 

In essence, a will is a legal document that explains who you want to inherit your possessions and money after you pass. It only takes effect after your death and must go through probate, a legal process for distributing assets.

If you don’t have a will, state laws will determine how your assets will be allocated — typically favoring immediate family members. So, if you want to leave money or other assets to friends, unmarried partners, or charitable organizations, you’ll want to create your will ASAP. 

Protect Your Loved Ones With Trusts and Life Insurance 

A trust is a little more complex than a will, as it involves transferring ownership of your assets into a trust account that can be managed during your lifetime. 

Unlike a will, a trust takes effect as soon as it’s funded. It gives you more control over how and when your assets are distributed. For example, you can stagger inheritances over time or place conditions on when heirs receive funds. You can also set up a trust to manage your assets if you become incapacitated or to protect assets for minor children until they reach adulthood. One of the biggest benefits is that most trusts bypass the legal process of probate, making it easier and faster for your loved ones to access your assets. 

Life insurance can also simplify the process of transferring your wealth, as payouts go directly to your named beneficiaries, bypassing probate. Plus, in most cases, life insurance proceeds are not subject to income tax, unlike other assets that may be taxable to your heirs. 

Set Up Power of Attorney and Healthcare Directives 

No one wants to think about being in a health crisis, especially at a young age. But if you don’t want loved ones to be left making difficult decisions without knowing what you would have wanted, it’s best to make your wishes clear in advance.

By designating a power of attorney, you give someone you trust the legal authority to manage your finances, implement estate plans, or even buy or sell assets on your behalf if you’re unable to do so. More importantly, you empower them to make healthcare decisions for you if you’re incapacitated, ensuring that your medical wishes are honored. 

A healthcare directive (also known as an advance directive) is essential for providing both your loved ones and your healthcare providers with clear instructions on how to proceed if you’re unable to express your preferences directly. A healthcare directive should include a living will, which specifies the kinds of medical treatment you want or don’t want if you’re in a terminal condition or persistent vegetative state. It should also include a healthcare power of attorney, which names someone to make medical decisions on your behalf if you’re unable to do so, and any other medical preferences, including do not resuscitate orders and directions for organ and tissue donation. 

Hopefully, you won’t need to enact any of these steps anytime soon. But having an estate plan in place now can give you peace of mind, knowing your wishes will be followed and your loved ones will be protected.

Looking to build a legacy? Check out our Life to Legacy guide for expert advice and smart moves you can make today.

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