For many in older generations this may be surprising to read, but Millennials are now approaching their 40s! This has a lot of implications for the broader economy, but it also means that many Millennials are finally planning their estates.
How are they estate planning?
The vast majority of Millennials, about 75%, are choosing will-based estate plans, according to the publication Trust & Will. They surveyed about 23,000 Millennials. About 20% use trust-based estate plans.
As for their reasons to finally start planning their estates, even after decades of putting it off, most Millennials said having their first child pushed them over the hump. However, others cited the death of a family member, an increase in net worth or the buying of a home as what pushed them toward estate planning.
Will-based versus trust-based
Often, people choose will-based estate planning over trust-based because of the ease of creating a will-based estate plan and cost. Often, you can create a simple will for free or relatively cheaply online. However, these estate planning documents are not always legally enforceable, they rarely plan for tax minimization, and are not fully customized. Even for relatively straightforward will-based estate plans, the help of an attorney is crucial, even if it is just to ensure that the document is legally enforceable in Tennessee.
Can a will be enough?
For young people with relatively few assets, a will can be enough, as long as it includes a medical power of attorney and end-of-life wishes. This will ensure that your wishes are known, should you become incapacitated, and that your family is empowered to make medical decisions, should you be unable. However, for older Millennials and anyone with significant assets, a trust-based real estate plan is often a better option.
Benefits of trusts
For Memphis, Tennessee, residents, the key benefits of a trust are probate avoidance, tax minimization and you have much more control over what happens after you die. For example, if all of your assets are moved to a trust, probate can largely be avoided. Trusts can also be used to minimize taxes and even help one qualify for government assistance at old age. As for control, you can actually create trusts to care for your heirs and your lineage that distributes money based on how you want it to be distributed. For example, if you have a family member that you believe will squander money or use it for drugs or alcohol, the trustee can be empowered to simply use the money to pay for that family members reasonable living expenses, ensuring your money will be spent on what you want it to be spent on.