Posted in Blog - "Altman Speaks"
Reasons Millennials Avoid Estate Planning
Approximately 60% of Americans will die without a Will, much less any other critical estate planning documents. Millennials are among the worst offenders when it comes to kicking the estate planning can down the road. Some of the most common reasons:
Assets – Often, people don’t believe they have enough assets to justify estate planning. They perceive it as something that only the Trumps and Rockefellers of the world need to address.
Today, with federal and state exemption rates in the multi-millions and rising, only .5% of Americans will be subject to estate tax. What this means is that planning has less to do with the amount of assets a person leaves behind and more about to whom, when and how they want them distributed. Short of a Will, these decisions will be made by a court, in accordance with state laws, and likely not in the manner in which you may have chosen for yourself.
Cost – Some people don’t want to invest money in planning or they think they can cut corners by doing it themselves.
Does proper estate planning cost money? Yes. Are there countless of online services like LegalZoom claiming to offer legal documents at a fraction of the cost? Yes. However, if cost is the predominant factor preventing you from planning, consider this:
- Not planning could wind up costing you and your heirs significantly more money in court fees and/or taxes, more than offsetting what it would have cost you to plan.
- Mistakes are costly and often irreversible. Judges will not care what your wife or your kids claim you would have wanted or may have intended. Sans a legal document, they will defer to the law. Period.
- Lack of planning could be the difference between life and death. Do you want emergency decisions regarding your health to be made by someone you trust or by someone the court appoints? These are serious considerations with serious consequences. It is not the time to cut corners or play estate lawyer for the day.
Feelings – Some people quite simply don’t want to think about their mortality. It’s uncomfortable for some to imagine, much less discuss, so they put it on the back burner or avoid it altogether.
It is important for people to consider, however, the emotional toll that failing to plan causes families. It leaves critical questions unanswered in the event that you become mentally or physically incapacitated:
- Who will make medical and financial decisions for you?
- Who will care for your children?
- Who will run your business?
I have seen the closest of families torn apart over a failure to address these decisions. And this is all while the person is still alive! That doesn’t take into account the confusion and turmoil caused over assets when a person dies! Ask yourself if avoiding paperwork is worth the pain you will potentially cause your family later.
And the most common reason that most younger Americans don’t do estate planning…
Age – While the above factors are contributors as well, the most common reason that younger Americans don’t do estate planning is because they think they have plenty of time. Being young and healthy, they don’t anticipate the need to do estate planning just yet. No one is expecting to die at a young age, but the reality is that even a healthy, young adult can be taken suddenly by an accident, illness or random act of violence. Planning for such a possibility is the responsible thing to do.
The Bottom Line
Estate planning has evolved greatly over the years. I want Millennials to know that today’s planning is about much more than assets or taxes. It’s not just something that the ultra-wealthy or older generations need to be concerned with. It’s not only about your wishes upon death, but about critical choices impacting your health, family, money and business while you’re alive. Estate planning is a process, not a product – something that will grow and change along with you for years to come. And, finally, it is not something that you can afford to put off until tomorrow…