1.
“I am too young to start
considering estate planning.”
This is perhaps
the most common estate planning misconception of millennials. Many in their 20s and 30s believe
they are “untouchable” by death or incapacitation because they are in the prime
of their lives; yet tragedy does not discriminate. All too often we hear of the
college student with a promising future who was in a terrible car crash, of the
young father suddenly befallen by a heart attack, or of some other person
struck by unexpected catastrophe at all too young of an age.
It’s
understandable that no one wants to think about and plan for tragedy,
especially at a young age. Grappling with your own mortality is difficult, but it
is important to consider the consequences if you don’t. If tragedy strikes, those
closest to you will be left to make life-altering decisions, ranging from your
immediate and future medical care to your family’s wellbeing. Without your
estate plan in place, those charged with making these difficult decisions will
be left in the dark—without your input or opinion. An estate plan obviates
these uncertainties.
A
well-planned estate helps protect your financial interests, personal values and
well-being, primarily through three documents: a Will, a Power of Attorney, and
an Advance Medical Directive. Here is a brief description of the role that each
of these documents plays in your estate plan:
Will:
Your Last Will and Testament provides for various decisions on financial
and non-financial concerns that arise upon your death. Common issues to provide
for include:
-
Burial/cremation,
funeral arrangements and organ donation
-
Inheritance
provisions
o How much?
o To whom?
o From which source?
o On what conditions?
-
Future
arrangements for minors and other dependents
-
Payment
of debts and taxes
-
Appointment
of the person to carry out your wishes
Without a
Will, you die intestate, meaning that these decisions will likely be placed in
the hands of a court-appointed representative. In our next blog post, we will
highlight the many problems that arise when one dies intestate.
Power
of Attorney (PoA): Unlike a Will, a PoA is a document
that is in effect only when you are still living. Times of tragedy are often rife
with financial concerns. A PoA allows for an agent to act on your behalf with
regard to financial matters (contracts, debts, insurance policies, bank and
brokerage accounts, etc.) during a time in which you are rendered incapacitated
and therefore unable to attend to these matters on your own.
Advance
Medical Directive (AMD): An AMD is, in effect, a PoA for
medical decisions and should be considered an absolute necessity for anyone
over the age of 18. Just like a PoA, an AMD is only effective when you are
still living and puts an agent in place to make decisions for you if you are incapacitated
or otherwise incapable of making your own decisions. Without an AMD, important medical
decisions will be made by the attending physician without regard to your
personal or religious preferences. Having an AMD in place gives the authority
to make these decisions to someone who you can trust will make the right decisions
on your behalf, including with regards to the admission and discharge from any
health care facilities (including nursing homes), the use of pain medication, the
use of artificial nutrition and hydration versus allowing natural death, etc.
These decisions are extremely personal and on which most everyone has a preference.
2.
“I don’t have many assets so I have
no need for a will.”
This is a
common refrain from millennials when you tell them the importance of having a
Will, even at a young age. Perhaps this is just a polite way of them saying, “Leave
us the **** alone,” but we believe it is our responsibility to dispel the notion
that a Will is only for those that have a lot of asset. First and foremost, a will
is about recognizing the relationships that you forged in your lifetime, be it
with family, friends or an organization. When you die without a Will, the State
pays little heed to these relationships when it administers your estate.
The
financial aspect of caring for your surviving spouse, children, or aging
parents undoubtedly plays a significant role in what you leave behind. You want
the people you care for to be better off financially. But what if there is
little you can do to improve their financial standing? Consider also the personal
legacy that you leave behind with mementos of your relationships. Maybe it’s
something valuable, like the house in which you raised your children; but maybe
it’s something with little value, like the tattered glove that you used to play
catch with your father. Everyone reading this blog post has some earthly
possessions that hold particular sentimental importance not only to them but to
others. Having a will prepared ensures not only your financial legacy but also
your interpersonal legacy.
3.
“I am only hurting myself by not
planning my estate.”
False.
In fact, in many cases you are probably hurt the least, and it’s your loved
ones who are hurt. Not only are they left to cope with the recent loss or
incapacity of their loved one, but they are also left with great uncertainty with
making your medical and financial decisions, as well as dealing with many
issues (court-appointed representatives, contested property, unnecessary
probate, taxes and court costs) that could have easily been prevented had you
planned accordingly. When someone dies intestate, their wishes are not made
known, which often leads to inter-family disputes. This can be of particular
consequence when dealing with the future care of minors and other dependents.
4.
“I don’t need to pay an attorney
for something I can do on my own.”
With the
rapid development of online legal services just a click away, this is quickly
becoming one of the most prevalent misconceptions about estate planning. It
seems like a no-brainer: Why throw away money paying a lawyer to draft these
documents when you could go to sites like LegalZoom or to your local office
supplies store and purchase a $50 Mad Libs-style DIY estate plan? These are
arguably the most important legal documents a person can have. Are you sure you
can rely on these $50 documents in the most dire of circumstances when you pay
more each month for auto insurance, life insurance, and health insurance? When
something seems too good to be true, it usually is just that.
Yes, these
services offer you the ability to draft these documents without paying for a
lawyer. While these forms allow for customization, there is no personalization.
They do not and cannot understand your true wishes or reasons for planning your
estate as you do. Without knowing this, they cannot possibly provide the
protection you need from the various contingencies that are bound to arise.
Lawyers
cost more because they do more than simply fill-in-the-blanks. They read up on
evolving law and consult with fellow lawyers because estate planning is not “one
size fits all.” If you believe you are the same as the Texas truck driver or
New York investment banker because you all have a wife and two kids, then we
suggest using LegalZoom. However, if you believe that there are intricacies or
personal wishes that you wish to incorporate into you estate plan, we suggest
you hire a lawyer.
5.
“I am not at a point financially
where I can afford to pay a lawyer.”
We at Oehrig
& Mailman understand the struggles, financial and otherwise, that come with
being a millennial trying to establish a life: a new job, a new marriage, a new
house, a newborn. For these reasons, our estate planning packages are
specifically tailored to ensure that your estate plan is affordable. We also
offer special promotions and payment options because we want to assist
families, not impoverish them. If what you have read in the blog makes you
think you need to start thinking about estate planning, call us at (410)
952-8268 or email us at info@omjustice.com.
We would be glad to discuss any questions you may have in a free consultation!
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