New Year, New Will?
Pricewaterhouse Coopers recently surveyed 5,500 people between the ages of 23 and 35. The goal of the survey was to find out just how much this group really knew about personal finance, their savings, their debts and to find out how satisfied, overall, they were with their financial life. As it turned out, this group—known as the Millennial generation—are plagued by lots of debt, small savings accounts and little knowledge of personal finance. This could, in turn, have a significant effect on future generations. Some of the most troubling issues which came out of the study included the following:
At least half of those surveyed said they would be unable to come up with $2,000 in the event of an emergency.
More than half of those surveyed don’t believe they will ever be able to repay their student loans, regardless of their income bracket.
A bit more than forty percent of those surveyed have taken advantage of some type of “alternative financial services product,” including high interest payday and auto title loans, advances on tax refunds, pawning items at a local pawnshop, and obtaining furniture and electronics at rent-to-own stores.
Only about a third of those surveyed have a retirement account, and nearly one-sixth of those who did have a retirement account had taken out a “hardship” withdrawal within the past year.
All of these facts appear even more dismal when coupled with the fact that nearly three-quarters of parents with minor children don’t have an estate plan of any type, even down to a simple will. For those who don’t have a will, it is incredibly important to prepare one. For those who do have a will—don’t congratulate yourself just yet. You may have felt incredibly “adult,” when you had your will prepared, but are you aware that your estate plan needs regular maintenance in order to stay up-to-date and in good working order? With the advent of a new year, it could be time to take a look at your will, whether you are a Millennial, a Baby Boomer, or somewhere in between. Consider the following changes in circumstances which could require changes to your will:
Relationship changes are one of the top reason to change your will. You may have married, divorced, had children, or your children may have reached the age of majority. Go through your list of heirs, representatives, executors, trustees and guardians, considering whether circumstances have changed since you prepared your will.
Asset changes are another important reason to update your will. You may have acquired or sold a major asset, you may have started or closed a business, or you may have acquired a new insurance policy or pension plan which require you to name beneficiaries.
You may have moved to another state, which could have different rules regarding your will. It would not be a good idea to find out when it is too late that your old will fails to meet your new state’s requirements.
Changes in tax laws can result in changes in your will or trust—state and federal tax laws change on a regular basis, and it is important to know whether these changes affect you or not.
Reviewing your will when the new year rolls around is a good way to start your new year off right. You can determine at this time whether there are changes which need to be made. Additionally, any time you go through a major life change, you should also determine whether necessary changes should be made to your will.
Your will could potentially be the most important document you will ever sign, as it protects your loved ones in the event of your death. If you don’t have a will—or if your will is outdated—the courts will decide what happens to your assets, and even who will have custody of your children. Don’t leave such important decisions to chance—contact an experienced estate planning attorney today.