Sixty-two percent of millennials don’t have a will or trust, leaving only 36% prepared for the future, according to a 2024 study by Trust & Will.1
As America’s leading personal finance expert, Suze Orman has been a vocal advocate for the importance of estate planning. Her advice2 is spot-on, and here’s why you should listen.
1. Create a Revocable Living Trust
Suze emphasizes the significance of creating a revocable living trust, which can help your assets avoid probate and ensure they go exactly where you want, as quickly as possible, with the least amount of expense.
2. Pack Your Trust with Assets
Once you have a trust, Suze advises packing it with your major assets, including your home, savings accounts, and non-retirement investment accounts. Keep your IRA and 401(k) accounts separate, as they’re governed by special rules.
3. Have a Will as a Backup
While a trust protects your major assets from probate, Suze recommends having a will to specify how you want your non-investment possessions to be disbursed. Be as detailed as possible to avoid arguments among your loved ones.
4. Don’t Make Young Children Beneficiaries
Suze cautions against making young children the beneficiary of any asset. Instead, consider setting up a trust that specifies how and when they can access the funds.
5. Secure Your Own Retirement First
Before giving anything away, Suze advises thinking seriously about your own future. Today’s 65-year-old woman will live an average of 20 more years, so ensure your retirement is secure before contemplating giving anything away.
6. Update Beneficiaries on All Accounts
Suze stresses the importance of making sure all the beneficiaries on your accounts are the people you want to be named. This is an essential step in ensuring your assets pass to your loved ones as intended.
7. Have a Durable Power of Attorney & Advanced Directive
Suze considers it essential to have a durable power of attorney for healthcare and an advanced directive. These documents ensure your wishes are carried out if you become incapacitated.
8. Understand the Probate Process
Despite its significance, only 65% of Americans understand the definition of probate, while 19% remain uncertain. (ref) Suze emphasizes the need for heightened awareness and preparation in estate planning to avoid the lengthy and costly probate process.
9. Seek Professional Guidance
A staggering 65% of Americans would seek help from a probate attorney, highlighting the reliance on professional assistance during the complex process.
Suze recommends hiring an estate attorney to review your finances and set up a revocable living trust, even if it costs $1,500 or more.
10. Address the Emotional Toll
Many people put off creating an estate plan due to the emotional toll of thinking about end-of-life plans. Suze acknowledges this challenge but emphasizes the relief and sense of accomplishment that comes with having your affairs in order.
11. Plan for Your Pets
In 2024, 83% of millennial pet owners assigned a guardian specifically for their pets, up from 71% the year prior. Suze encourages pet owners to designate someone as a pet guardian in their estate plan.
12. Regularly Review & Update Your Plan
Suze stresses the importance of regularly reviewing and updating your estate plan, especially after significant life events like marriage, divorce, or the birth of a child. Keeping your plan current ensures it reflects your current wishes and circumstances.
Source:
1. Trust & Will
2. Oprah
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Davin is a jack-of-all-trades but has professional training and experience in various home and garden subjects. He leans on other experts when needed and edits and fact-checks all articles.