Summary: Generation X (those born between the mid-1960s and late-1970s) comprises a significant part of the population, and, as Siedentopf Law explains has its own specific estate planning issues related to family, personal assets, and business investments.
Right in between the headline-making Baby Boomer and Millennial generations is an age group known as Generation X. These individuals were born anywhere between the mid-1960s all the way to the late 1970s. While this specific demographic may be unfamiliar to some, it comprises a significant part of the population. According to a study conducted by Harvard University’s Joint Center for Housing Studies, there are approximately 82 million “Gen X’ers” living in the U.S. right now. Most of this group is not yet old enough to retire; however, there are some estate planning issues that they might want to consider.
Traditional Estate Planning Documents
As with any estate plan, there are a few essential documents which everyone should have in place. Those items include a will, power of attorney, and a healthcare advance directive. (For a detailed description of each, you can read our blog “What are the Must-Have Estate Planning Documents?”. These documents allow people to control what happens to them, their family, and their property in case of incapacity or death. A Generation X estate plan should provide for the possibility of incapacity. It should also take into consideration the current economy and technological environment, especially when it comes to protecting a Generation X’ers family and personal assets.
Protecting Your Family
The age span of Generation X is anywhere between the mid-30s to early-50s; accordingly, their families (if they have children) may be younger, or could already be adults themselves. If you are taking care of a child, it is important to have an estate plan in place that protects them. For younger children, you should have a Last Will and Testament that designates a guardian (should both parents die or become incapacitated) and ensures your child’s inheritance is secure. You can also name a standby guardian – someone who would take care of your child if you are alive, but unable to care for them yourself. In addition to a will, Generation X’ers should also consider protecting their family via a life insurance policy. There are a number of policy options available, with benefits usually protected from creditors.
Protecting Your Personal Assets
Unlike its predecessors, Generation X is not limited to traditional assets such as real estate and stocks. This group has a mix of tangible and technological assets. For the more traditional assets, like retirement accounts and 401(k) programs, the Generation X’ers should make sure that they have identified all of the accounts from previous employers and that the beneficiary designations on those accounts are up to date. For real property, Gen X’ers should make sure all of their assets are correctly titled (click here for our guide on property titling). You might want to use a trust for any real property outside of Georgia – this will enable you to avoid probating the property in that other state. If you are using a trust in your estate planning, be sure to re-title all of those assets in the name of the trust.
As social media becomes a more prevalent part of Generation X’s daily life, their digital assets also have become an area of growing importance. Estate planning documents should include what happens to a Gen X’s email accounts, social media profiles, and online file storage if that person passes away. The documents should list all of the digital assets and name a person(s) who will manage those accounts. (Click here for our blog on digital assets and estate planning).
Protecting Your Business and Financial Investments
Some members of Generation X are just beginning to establish their career and professional reputation. Others are more established businesspeople and entrepreneurs. No matter their choice of employment or number of year in the field, Generation X has several options available when it comes to protecting its business and financial investments. A trust, for example, can protect assets from creditors of later beneficiaries while still enabling a person to maintain control and access to his or her wealth. Some of the recommended trusts for this generational group include: Life Insurance Trust (owns life insurance and gives the proceeds excellent creditor protection), Self-Settled Trust (creator of trust is also beneficiary), Charitable Lead Annuity Trust (provides for income tax deductions while spreading out contributions), or a Revocable Trust (hold assets for your own benefit during lifetime, with remaining assets going to designated beneficiaries after death). If you decide to create one of these trusts, make sure to consult with an attorney to make sure the trust is fully funded, and that anything that is not transferred into the trust during your lifetime will make it into the trust eventually.
© Sarah Siedentopf and Siedentopf Law, 2018. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Siedentopf Law and EstateLawAtlanta.com with appropriate and specific direction to the original content.