Estate Planning 101

Most people, especially members of the younger generation, don’t want to think about what happens after they die. Death seems far off and even unlikely to those in their 20s and 30s. And as people are getting married and starting families later than previous generations, some Millennials might think estate planning is not necessary at this point in their lives.

However, the unforeseen can and does happen. While your family is grieving, the last thing they should be worried about is how to access your bank account. That’s why you need to do your due diligence now so that your friends and family aren’t left in a lurch.

This why estate planning at any age is critical. Your estate is comprised of everything you own— your car, home, other real estate, checking and savings accounts, investments, life insurance, heirlooms, etc. No matter how large or modest, everyone has an estate in the eyes of the law. Speaking of legal matters, an attorney who practices estate planning law can help you navigate all the intricacies of drafting a will and covering all your bases.

Estate planning at the very basic level should take into account the following considerations:

1. Who will inherit your stuff?

A will is a legal document specifying how an individual's property and affairs are to be transferred and managed after death. Maybe you don’t think it matters who gets your expensive bike or designer bags, but it does. No one wants to imagine their family and friends fighting over your worldly possessions. Estate planning covers these bases and more to mitigate such tensions.

A will can also serve to declare who you wish to become the guardian for any minor children or dependents, and who you who you want to receive certain items you specify in the document. Someone designated to receive any of your property is called a "beneficiary."

It’s important to know that some types of “property,” including certain insurance policies and retirement accounts, generally aren't covered by wills. In these cases, you likely listed beneficiaries when you took out the policies or opened the accounts. Confirm this important detail and make sure you keep beneficiaries up to date so there’s no doubt about your intentions.

2. How will loved ones access your digital and financial assets?

In the event of your death, your loved ones should be able to login and shut down your social media accounts. For this reason, make sure you keep a list of account logins and grant secure access to this information to someone or multiple people. The same goes for your banking credentials.

3. Who is the beneficiary of your 401K or retirement plan?

At this point in your life, maybe you don’t think your nest egg is big enough to necessitate beneficiaries. But know that naming a legal beneficiary can prevent a time consuming and exhausting process, because of probate. Probate is the legal process through which upon death, a person’s estate is properly distributed to heirs and designated beneficiaries and any debt owed to creditors is paid off. In general, probate property is distributed according to the decedent's last will and testament, if there is one, or according to state law if no will exists.

4. Do you have a plan for what happens if you are disabled?

Death isn’t the only outcome to consider when undergoing estate planning. An accident or illness could impact your ability to make decisions about your health, medical care or assets. In that case, you need to have determined who has power of attorney and who’s your health care proxy? These two legal documents could save your family some grief if there comes a time when you’re not able to communicate your wishes.

The bottom line? While we all want to believe that we’ll live long, healthy lives, there are no guarantees. That’s why it pays to create an estate plan so that nothing is left to chance in the event of your untimely death, illness or accident.

So what’s the best course of action to enjoy peace of mind? An experienced estate lawyer knows what questions to ask to ensure that you are fully protected. In the meantime, you might find these online resources from the American Bar Association to be helpful.