If you were to ask a millennial to make a list of their life plans or priorities, it would likely include such things as educational and career accomplishments, vacation experiences and building relationships. Graduating, landing their desired job, paying off their debts, buying a home and traveling are likely to be high on that list. Estate planning, on the other hand, is likely to be near the very bottom, if it were to appear at all. This is unsurprising, given that the millennial generation is experiencing a delayed path to achieving traditional life milestones, and thus, in many cases, significant asset accumulation. However, a lack of emphasis on the importance of estate planning, and a lack of knowledge of the many benefits that can be gained from setting up an estate plan are likely also contributing factors.
For one, Part II of Ontario’s Succession Law Reform Act, which governs how your assets are distributed if you die “intestate” (without a Last Will), provides a very rigid formula that is based on traditional societal values. These rules can be summarized as follows:
- If the Deceased has a spouse (common law spouses are not included) and no issue, the spouse is entitled to the entirety of the estate.
- If the Deceased has a spouse and issue, the spouse is entitled to the first $200,000.00 of the estate, and the remainder is divided evenly between the spouse and any issue.
- If the Deceased has no spouse and no issue, the estate goes to the Deceased’s surviving parents, equally.
- If there are no surviving parents, the estate goes to the Deceased’s siblings equally (and if a sibling has predeceased, that sibling’s share goes to their respective children).
- If there are no siblings, the estate goes to the Deceased’s nephews and nieces equally.
- If there are no nephews or nieces, the estate goes to the next of kin of equal degree of consanguinity.
- If there are no next of kin, the estate escheats to the Crown.
When you begin to apply these rules, it becomes clear that for many millennials relying on the rules of intestacy means having their estate divided in a way that does not accord with their wishes. For example, the millennial generation are proving to get married later in life, and less frequently. Yet, unless you’re married, if you die without a Will your spouse will get nothing. Further, regardless of your marital status, creating an estate plan allows you to make specific bequests of your assets – of both sentimental and financial value – to the family, friends, and/or charities of your choosing.
Another advantage of creating an estate plan is that it provides you with the opportunity to plan for times of incapacity. As young, healthy individuals, living busy lives, incapacity is likely far from the front of the mind for many millennials. However, as unfortunate as it may be, accidents or unexpected illness can occur at any time. As a generation that is taking time to travel, adventure, and explore the world before entering the job market, creating a power of attorney allows you to appoint someone to care for both you and your affairs in the event that such an event were to occur.
Lastly, for a generation that is increasingly tech-savvy and active on social media, creating an estate plan is uniquely valuable because it allows you to document your intentions with respect your digital assets. In your Will, you can outline who is entitled to receive any online assets that have financial value – like Paypal accounts or loyalty rewards programs – and also how those digital assets with personal or sentimental value – like Facebook or Instagram – are to be managed and by whom. Stating your wishes in this regard can help to instruct someone who otherwise may not know how to access your accounts, and also works to eliminate conflicts that might otherwise arise among family members who disagree on how to manage them.
Understandably, setting up an estate plan is not naturally priority number one for the millennial generation. However, with an aging population, it is inevitable that there will be a significant wealth transfer between baby boomers and millennials for years to come. Thus, while this article provides just a few examples of the benefits of creating an estate plan for the millennial generation, the importance of doing so is only going to increase rapidly over time.
Alex Smith is an Associate within the Lancaster Brooks & Welch LLP corporate and commercial department where is focus includes Wills, Estates and Real Estate. Alex may be contacted at 905-641-1551.