Originally published here on March 23, 2020
The author of this article tackles the ways that younger adult age cohorts should be encouraged to think about future estate planning and transfer issues.
A challenge for younger adults is understanding the need for estate planning and wealth transfer when there are hopefully so many productive and happy decades ahead. But if financial affairs teach one anything it is that early preparation pays off big time eventually. To address some of the challenges around this is Matthew Erskine, managing partner of his eponymous New York-based law firm firm, Erskine & Erskine. The editors are happy to share these insights; the usual editorial disclaimers about outside contributions apply. To comment, email firstname.lastname@example.org and email@example.com
Climate change, financial inequality, job security, student debt, being creative, using your education, social change – these are some of the areas that any Millennial and Gen Z has in the forefront of their minds. When estate planning is mentioned, the usual response is “OK, Boomer” because estate planning is seen as an outdated and irrelevant idea in their world of technology, equality and change. Estate planning is, in fact, the most important thing Millenials and Gen Z can do to achieve their goals.
Estate plan? I don’t need no stinkin’ estate plan
You are right, you don’t need an estate plan – that is because you already have one; everyone does. It is called “intestacy”. In every state, every country and even in every terms of service agreement you sign there are rules that say how and to whom your assets will go to both during your lifetime and at your death. Traditional assets – cash, investments, real estate, etc. – that you own in your name are distributed according to how the laws of intestacy of the state where you reside. Usually, this means your spouse or your closest blood relative. If there are no blood relatives, your assets go to the state.
For digital assets, insurance, retirement accounts, bitcoins and other alternative assets, the person you designate receives the assets. The trap is that, if you do not follow the precise requirements outlined in each of these contracts, the rules of intestacy may still apply or even worse the assets may default to the company controlling those assets. The result is that Apple ends up owning all of your photographs and other data stored in your iCloud account and there is nothing your heirs can do about it.
All I have is debts, so what does it matter?
You may be underwater with debt and may feel that you will never get out but estate planning is not just about money – it is about keeping control of who you are and what is important to you. If you are mentally or physically incapacitated, you cannot manage your online data, your healthcare treatment or even where you will live. Estate planning includes designating someone to act as your agent to manage your affairs if you are unable to do so yourself. Think of it like the accidental loss insurance on your phone – you hope you will not need it, but when you drop your phone off a cliff, you are glad that you have it. Further, some of the most creative people I know are Millennials and Gen Z, especially in the new online areas of the arts. This may not be worth much financially today, but it has great emotional and personal value now and into the future. You need a responsible steward of your digital legacy.
I don’t have the time or the money to do an estate plan.
Getting the documents done for an estate plan is cheap or even free. The cost is in the planning, not in the drafting. A simple plan is relatively inexpensive – a few hundred dollars. A complex plan is more expensive. Your estate planner takes a look at what you want to do, and asks “What circumstances, if they exist, prevents these documents from achieving your goals? When will those circumstances occur, and how can we rewrite the documents to achieve your goals despite this?”
So, before you say “OK Boomer” think about who you are, what you want and how you could get it. Millennials and Gen Z are, and will be, the most creative, the most financially prudent, and the most idealistic of generations. To keep in control of who and what you are, or may be, you will need to have the documents in place to put you and your assets into the hands of the people you choose rather than whoever the state or the social media platforms decide. Estate planning is not just for Boomers, it is for you.
About the author:
He focuses on strategic planning and legal services for business owners, professionals, individuals, families, collectors, and inheritors of unique assets. Helping his clients and their families solve their problems through customized estate, tax and management solutions.
Erskine has a particular expertise in the stewardship of unique assets that few other estate planning and trust attorneys or family offices can match. Working with collectors of coins, fine art, jewelry, heirlooms, and other valuable assets, as well as owners of real estate and family businesses, Matt brings his and his family’s generations of experience and intimate knowledge of unique areas of the law to help clients achieve their desired investment and personal goals. This includes strategic planning and execution on forming operating and non-operating foundations.The Erskine family has been counsel to client families since 1876, overseeing estate and income taxation planning, personal trusts, dynasty trusts, private foundations, and family offices.
Matt is also active in numerous community organizations in the Worcester, Massachusetts area, including the American Antiquarian Society, the Worcester Economics Club, and the John J. Kittredge Numismatic Foundation. After graduating from Lawrence Academy, Matt received his BA in Medieval History from Carleton College and his JD from Suffolk University Law School.