Millennials are a loosely defined group of people (those born approximately between 1981 to 2001) who are now beginning to enter the workforce and acquire their own assets. With an aging population it is inevitable that there will be a significant wealth transfer between baby boomers and millennials over the next several decades. In order to plan for this, the younger generation should turn their mind to drawing up a Will, giving careful consideration to who they wish to benefit and take steps to protect family wealth and/or an inheritance. Not only is succession planning important, a Will clearly outlines their intentions and alleviates stress for families if an unexpected death occurs.
Why is it important to prepare a Will when young? A young person who has no dependants and only plans to leave their assets and personal effects to their parents may view the expense of a Will as unnecessary as their wishes can be addressed on intestacy under the Ontario Succession Law Reform Act. That being said, a Will safeguards against changing circumstances and as well is an important educational tool in increasing financial literacy. A millennial may not own significant property currently, but may expect to do so in the future, or decide to have children. In Ontario and many other jurisdictions, marriage revokes a prior Will, unless made in contemplation of marriage. Having Wills in place as a young couple will provide protection if either were to die unexpectedly. As well, if they are living common law, under Ontario legislation, unless they do so under their Will, a common law partner is not entitled to any share of the deceased partner’s estate on an intestacy.
Not only is a Will a safeguard, a Will allows one to decide who to put in charge, how to allocate money, and to whom. What intestacy laws do not contemplate is carrying out particular wishes. This includes:
- Legacies and bequests of a specific property to family, friends, and/or charities;
- Multiple residual beneficiaries of their estate;
- Funeral and burial wishes;
- Executor and trustee appointments;
- Insurance and TFSA/RRSP designations;
- Trust provisions for children (ex: 1/2 at 25 and the remainder at 30) and a spouse (ex: a spouse and/or family trust); and
- Guardians of minor children.
Another consideration for a tech-savvy generation is digital assets and accounts. For a social media obsessed generation, very few understand what happens to their accounts and assets on death. Some social media entities, such as Facebook, have privacy rules or terms of use that outline management of the account on death, whereas others are less specific. To ensure there are no issues with access and management, maintaining an accessible account and password list is helpful. It is also important to include a specific designation regarding digital assets and accounts in their power of attorney for property and Will to provide the attorney or executor with management power.
Incapacity planning is also key to the estate planning process. As a young healthy individual in their twenties, incapacity is not at the forefront of their mind, but accidents or unexpected illness do happen. Having the freedom to appoint their chosen attorney, but also make it easier on their family by preventing a costly guardianship application to the court, is important. Powers of attorney for property and personal care should not be overlooked. By the time they become necessary, it may be too late.
We encourage millennials to see postmortem planning as a long-term investment in their future and a preventative measure for unanticipated circumstances. Having this conversation early with the younger generation will only make this topic easier in the future and is an important stepping stone to taking control of one’s future.
The comments offered in this article are meant to be general in nature, are limited to the law of Ontario, Canada, and are not intended to provide legal or tax advice on any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your personal circumstances.