Long gone are the days of white picket fences and nuclear families. Today, you can expect a colorful array of blended families with unique personalities and even more unique needs. As the “newer” generations begin to age – that’s right, many millennials are in their 40’s now! – you may have noticed a major shift in family dynamics. The most obvious shift has been the rise of blended families, single parents, and childless households. There’s a lot less pressure on young people to settle down early and start having children. In fact, if this sounds like you, you should stick around because you’ll probably appreciate how this affects your estate planning!
Estate Planning Myths
If you’re young and “broke” it’s easy to just assume that you don’t have an estate. But an “estate” doesn’t mean that you have to have sprawling acreage, a massive investment portfolio, and half a dozen kids… you could also be a rich spinster who leaves her entire fortune to her cat – really! All jokes aside, consider this: if something were to happen to you and you were no longer able to care for yourself and make decisions on your own, who would you trust to make those decisions for you and have your best interests in mind? Do you still trust your parents or family to make decisions that respect your personal beliefs and life choices? If you pass away and you have pets, who will care for them, and what if they get separated? Anyone with assets or dependents of any kind should have an estate plan. As you can see, an estate is more than just objects and liquid assets. You could have a balance of -$20.00 in your bank account, and your car can have 300,000 miles on it, but you can still benefit from an estate plan.
Modern and Blended Family Systems
The U.S. legal system doesn’t leave a lot of wiggle room when it comes to power of attorney for people and beneficiaries without an estate plan. Strictly speaking, if you can’t speak for yourself, it’s your spouse, or parents if you’re unmarried. There isn’t a lot of wiggle room without some legal back and forth. Imagine being separated or estranged from your spouse for years or decades only for them to be the one who decides whether or not to pull the plug. Yikes. In another scenario, you may have a lifelong, loving relationship with your partner in unwedded bliss, only to find that they have no legal right to make decisions in your best interest. Add a child to the situation and things become even more complicated, and in some cases heartbreaking.
Generational Wealth Distribution
Anyone would be hard-pressed to deny that there is a huge wealth gap between generations. Baby boomers (born 1946-1964) are the smallest population in the U.S. yet hold over 50% of the wealth. Compare that to millennials (born 1981-1996) who own less than 5%… and apparently Mark Zuckerberg constitutes a whopping 2% of that! This leaves many millennials and subsequent-gen z’s (affectionately called “zoomers”), feeling left in the lurch in regard to their wealth opportunities.
Say that you have developed a good-sized nest egg, but don’t intend to have children. Without an estate plan or next of kin, all of your assets are absorbed by the government. It’s safe to say that most people want to choose where their money and assets go after they pass. Do you want to leave everything to a sibling, niece, nephew, parent, or even friend? If you have pets, would you like to build their trust to make sure that their expenses are paid and their needs are met? These are all things that you can build within an estate plan.
An estate plan does more than divvy up your assets. It protects you, your future, and the future of your loved ones. Now that there is significantly less stigma surrounding mental health and boundaries, there’s a lot more emphasis on our “chosen” families. If you have questions about how to make sure that your best interests are protected with an estate plan call White Oak Wills and Trusts at (503) 928-8664.