Published January 11, 2019 by Jason Smolen and Dan Ruttenberg
Time to put aside your preconceived notions about millennials. It’s hard to believe, but some in the generation are starting to close in on their 40s. Born between 1980 and the mid-1990s, they have growing families, assets, bills and pets, just like other generations before them. And just like those previous age groups did when approaching life’s milestones, millennials need to start estate planning. “It’s no less important for this generation than for their parents,” say estate-planning attorneys Jason Smolen and Dan Ruttenberg of SmolenPlevy.
That’s not to say millennials don’t pose different challenges. Socked with debt from college tuition, and cautious about more spending, they may not think they have much in terms of assets. While they may have a point, they could also be overlooking some important possessions. Does their job provide a life insurance policy? Do they have a home, a car and furnishings? Most of all, do they really want the state and courts to decide who inherits those possessions if the worst were to happen? What about custody arrangements for their children? Guardians?
Why Millennials Need to Think About Estate Planning
While turning 40 may seem too soon to start thinking about death and disability, estate planning is really meant to prevent complications. It is simply the process used to make sure loved ones—and even unloved ones—aren’t left in a state of confusion and potentially in conflict with one another over what to do when someone becomes incapacitated or dies.
Still, in this new age, there are a handful of new concerns that previous generations didn’t have to consider. Here are some modern-day concerns that millennials have when it comes to estate planning.
Your Estate Plan Will Need to Include Your Digital Life
Here’s the twist for millennials: Estate planning needs to particularly include instructions about their digital lives. Rare is the millennial who doesn’t own at least some digital assets. Smartphones are full of music, social media accounts, online bank and brokerage apps, bill-paying services, cloud-based document storage, pet-health apps, real estate apps, a zillion photos and videos—and now even cryptocurrency. The list goes on.
You Will Make Sure Your Loved Ones Can Access Your Accounts
Estate planning helps keep millennials’ family and friends out of hot water. “Online accounts have terms-of-service agreements, and states have laws, affecting the custodians of digital assets,” says Smolen. “A third party who accesses an account without formal authorization may violate federal or state privacy laws.”
Your Cryptocurrency Won’t Disappear
It’s about more than what happens to those Houzz photos and YouTube videos people have saved on their iPad. According to a report by Edelman, 25% of affluent millennials have cryptocurrency and 31% are interested in using it. Whether or not someone is into Bitcoin and its cousins, odds are their smartphone is a gateway to their financial life, possibly even including the use of Apple Pay or some similar digital wallet.
The Revised Uniform Fiduciary Access to Digital Assets Act
Many states have laws, such as the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), that establish default rules regarding access to digital assets by executors, trustees and other fiduciaries. The RUFADAA also allows users to establish rules in their will, trust or power of attorney. If they don’t leave specific instructions regarding their digital assets, the Act allows an account provider’s service agreement to override default rules.
What Happens If You Die Without a Will?
Anyone tempted to say, “Hey, what do I care about my stuff? I won’t be around,” should stop and think about the chaos they’re setting up for their family if they don’t have estate planning documents in proper order. Even if they’re single, leaving loose ends affects others: friends, employers, landlords.
In fact, in many states, if an unmarried person with no children dies without a will, regardless of his or her age, that person’s estate reverts to their parents. But what happens if their parents are no longer alive? What if that is not the direction they would choose?
“It’s important to provide a trusted family member or estate executor with access to one’s digital assets,” says Ruttenberg. People can also use an online service designed for digital estate planning. These services store up-to-date information about digital assets and establish procedures for releasing it to a designated beneficiary after someone’s death or incapacitation. While sharing login credentials with one’s representatives is important, it’s no substitute for covering digital assets in an estate plan.
“A lot of people, of all generations, tend to want to be aloof about these issues,” says Ruttenberg. “It’s smart to have an estate plan at any age, and definitely when you have children.”
Estate Planning Means Making Sure Your Loved Ones Won’t Have Financial Burdens
Financial security is about more than having a lot of money. It’s about not burdening one’s survivors with debt or other financial problems. And it’s about making sure significant others aren’t left in the dark about one’s financial arrangements. In marriages, one person tends to handle the finances, says Smolen. In the event of an unexpected death, the surviving spouse can be left unaware of all the financial investments and commitments their suddenly deceased spouse made—especially if they were digital.
Digital Accounts Make the Probate Process Take Longer
“Earlier generations typically had their bills and financial statements on paper,” notes Smolen. “So, we can usually have a pretty good idea of their accounts and assets within a month of their passing. But millennials do almost everything online. Unless they let their significant other or their attorney know where to find their accounts and passwords, it can take up to a year to piece it all together.”
The basic components of an estate plan apply to everyone—not just the wealthy. Those basics include a will, durable power of attorney, health care proxy and living will.
You Will Make Sure Your Children Are Taken Care Of
Estate planning is also the process through which young parents can provide for their children. For example, a trust can be set up enabling the parents to assign when and under what circumstances funds should be distributed to their children, so their assets don’t come under the control of a court-appointed administrator or a former spouse.
Avoid DIY Estate Planning
Thanks to the Internet—millennials’ typical go-to source for information and assistance—there are generic, fill-in-the-blanks estate-planning documents available online. But an app isn’t the right answer for everything in life, particularly something as important as estate planning. You’ve spent a lifetime putting everything together. It deserves attention to what happens if you’re not there.
A far better choice: retaining an estate-planning attorney who knows the latest federal and state laws affecting the disposition of digital assets, as well as the latest trial-tested language needed in wills and other estate documents to spare one’s beneficiaries from a court battle.
When to Speak With an Attorney
For estate planning questions and expertise, contact Jason Smolen at jdsmolen@smolenplevy.com or Dan Ruttenberg at dhruttenberg@smolenplevy.com.
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About the Authors
Jason Smolen
Jason Smolen is a founding principal of SmolenPlevy. Smolen’s knowledge of complex estate and business issues has drawn the attention of ABC News, USA Today, E! Online, Realty Times and the Bank of America Small Business Online Community. Mr. Smolen is a graduate of the City College of the City University of New York and the George Mason University School of Law. Smolen also serves as a board member of a local citizens association and recently co-authored an article titled Why You Should Think About Spousal Limited Access Trusts (SLATS).
Daniel H. Ruttenberg
Daniel H. Ruttenberg, JD, CPA, LLM is a principal with the firm. Mr. Ruttenberg received his Bachelor of Science degree with a double major in Accounting and Finance from the University of Maryland. He earned his Juris Doctor with Honors from George Mason University School of Law and his Master of Laws in Taxation with Distinction from Georgetown University Law Center. Mr. Ruttenberg also served as the Director of the Fairfax Bar Association (FBA) for seven years. During this period, he was also elected president – the youngest in FBA history and served as a member of the Board of Directors for the Fairfax Law Foundation.
