Your mother may cry and your father will definitely be uncomfortable, but it's not a bad idea to discuss the "what if's" of your death if you are a millennial, even if you don't have any children or a spouse.
But you might think about it if you want to spare your family members the added stress of locating your financial accounts or bearing responsibility for your debts at the same time they are dealing with your death.
Unfortunately, it's entirely possible to die young. The leading cause of death for millennials is accidents or unintentional injuries. That's why you should take these four simple steps to protect your loved ones, says Forbes in "Here's How To Financially Prepare For Your Death While You're Still Young And Unmarried."
- Check the beneficiaries on all your accounts. You probably can go online and change account beneficiaries. Let your beneficiary know what he or she is inheriting and where the account is located. Something like, "Hey, you'll be inheriting my 401(k) and here's the information on the sponsor of my company plan," would be good. You can also put beneficiaries on your bank accounts and other investment accounts with Payable on Death (PoD) and Transfer on Death (ToD) designations. Review your designations periodically for any updating after major life events like a marriage, the birth of a child, or divorce.
- Try to Avoid Probate Court. Probate is where the authenticity of your will is determined, your debts and taxes are paid, and your heirs are given your belongings according to your wishes in your will. Placing beneficiaries on accounts keeps that money out of probate while saving you unnecessary fees because the money goes directly to your beneficiary.
- Get a basic will! Creating a basic will is relatively easy and inexpensive. Your will should detail who is to receive various assets and should also provide guardianship for children and care for your pets. If you are married without kids in Maryland and you die without a Will, ONLY HALF of your probate assets will go to your surviving spouse, the other half goes to your parents! If you have kids, then approximately half will be divided among your kids, and if they are under 18, it will be held in a Guardianship account!
- Consider life insurance if you have co-signed student loans. Student loans may be a real curse, but it can quickly be transferred to your parents if they co-signed on a private loan. Federal student loans are usually discharged in the event of the death of the borrower, but private loans aren't always discharged. If your parents or anyone else co-signed on a student loan with you, you should have life insurance that at least will cover the loan. Set up the life insurance policy with the person who co-signed on your loan as the beneficiary. You also should have both life insurance and a will if you have children or other dependents who rely on your income.
Don't be surprised if your parents wave away your concerns and refuse to have the discussion with you at first. Use the steps outlined above as a guide for things you need to do and then speak with them about the steps you have taken. The goal is to make their lives easier and protect those you love should the unexpected occur.
Reference: Forbes (May 31, 2016) "Here's How To Financially Prepare For Your Death While You're Still Young And Unmarried"