Career goals are usually top of mind for millennials, and estate planning is not a pressing concern. It may fit in near the bottom of a to-do list, if at all.
However, accidents and illnesses happen unexpectedly, so it is best to be prepared. Creating your estate plan takes considerable thought, so here are five mistakes to avoid.
1. Neglecting to plan for minor children
If you already have a family or are planning to start one, you should arrange for the care of your children in case anything should happen to you. Make sure that you designate a guardian for the children in your will.
2. Avoiding income tax issues
The tax picture changes all the time, and you must remember this when planning for beneficiaries. Leaving certain assets to them may create unwelcome tax consequences. Required minimum distributions or RMDs can accompany inherited accounts. Therefore, discuss the pros and cons related to taxes when you meet with your estate planning attorney.
3. Lacking asset liquidity
If you want your assets split among heirs such as your surviving spouse and children, you will need sufficient liquidity. One of the best ways to ensure liquidity is to have life insurance.
4. Forgetting about long-term care
Roughly 70% of people over the age of 65 will require long-term care. For a millennial, senior health issues may seem a long way off. However, care becomes more expensive every year, so you should not fail to look into long-term insurance.
5. Failing to update
Remember not to let your estate plan documents stagnate. Changes occur in life. Events like births, deaths and moving to a different state require you to update your estate plan. Neglecting to do so is one more important mistake for a millennial to avoid.