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The importance of Millennial estate planning


Despite the belief that Millennials are young and inexperienced, the oldest Millennials are 38 this year and well on their way to retirement. Quite a few Millennials have made it big in the last 20 years, using strategic investments, business ventures and more to pave their paths toward millions.

What many Millennials lack, though, is a formal estate plan. Estate planning is not something that should begin just before retirement—it’s a crucial component of financial planning that you should start while you’re still young and earning money.

If you’re part of the wealthy group of Millennials that hasn’t considered what happens to your wealth (and health) when you reach your later years, now’s the time to start planning.


Estate planning aspects to consider

Everyone can benefit from establishing an estate plan, but millionaire Millennials, in particular, will need one to ensure that the future of their wealth is secure.

You may have only just started to consider the idea of heirs and inheritances at this point of your life, but it’s inevitable that your heirs will need to handle your assets after you pass. A well-thought-out estate plan will ensure that the wealth you’ve worked hard to accumulate gets passed along according to your wishes.

Additionally, formulating an idea of what you want to happen with your estate later can help inform your financial decisions in the short term, so you continue to work toward your goals.


Estate planning aspects to consider

Estate planning for the wealthy is a little different from estate planning for the average American family. Where most people can get away with establishing a will and powers of attorney, millionaires will want to set up their finances with more complex trusts to minimize taxes and probate and maximize the money passed down to heirs.

Obviously, you should designate medical and financial powers of attorney so that your assets and medical decisions will be in the hands of someone you trust, just in case of an accident. However, your estate plan should also include consideration for some of the following.

  • Establish trusts: Trusts are the ideal way to handle the inheritance of large sums of money so your heirs don’t have to go through probate, and you can enact more control over where your assets go. If you already have a family or beneficiaries you know you will pass your wealth on to, you can establish trusts right away and set restrictions as necessary. If you’re unsure of the inheritances you want to leave, you still have the option of establishing living, or revocable, trusts, that you can amend over the years.

  • Tax strategies: One of the biggest components of your estate plan will need to be determining ways to minimize the amount of taxes your estate will owe after you die. One way you can start reducing these taxes now is by giving annual gifts, which are tax-exempt up to a certain amount. Having a plan in place for later in life is also ideal, so you can continue to monitor your asset growth and make tax adjustments as necessary.

  • Consider charitable donations:If there’s a charity you value and want to continue supporting after you pass away, you can set up a trust to place assets in to distribute after your passing. Charitable donations help reduce your estate value, further minimizing the taxes owed.

By discussing these concepts and more, you’ll be prepared to safeguard your wealth as it grows throughout your lifetime and later pass as much as possible along to your heirs.

Finally, where many Millennials are buried in student loan debt and may not be financially prepared for retirement and beyond, millionaire Millennials have specific, unique needs. This is why it’s extremely important to seek out a financial advisor in Los Angeles that understands both the Millennial generation and wealth management.

Once you have the initial conversation with your advisor, it’s a good idea to revisit it every three to five years, making any necessary adjustments based on changes in your estate.


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Samuel Rad is an award winning fee-based Financial Planner with Affluencer Financial Advisors in Los Angeles, California. Mr. Rad has multiple licenses in the investments, real estate, and insurance fields. He has spent a considerable amount of his career lecturing at universities and companies, on financial topics such as financial planning, retirement planning, and estate planning. He currently lectures at UCLA and West Los Angeles College.

Contact:

13340 W. Washington Blvd.

Los Angeles, CA 90066

Email: sam@affluencer.com

Phone: 310.935.4726

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Samuel Rad is a fee based financial planner in Los Angeles, California. He does not provide investment decisions on behalf of clients; instead he provides comprehensive retirement advice and solutions, without encouraging people to buy products.

 

In fact, he does not manage securities nor is he affiliated with any investment or securities firm including any firm generates management fees based on the purchase or trade of stocks, bonds, or mutual funds. He simply provides clients with unbiased, independent, objective advice on their personal financial goals.

 

The word “investments” in this website refers to real estate, and fixed investments. Sam does not hold registrations with FINRA, SEC or CA State.

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