With Increasing Life Spans and Growing Online Presence, Estate Planning Concepts Must Change to Accommodate New Generation
When most people think of estate planning, they think of transferring money and property in the most painless way possible to spouses, children, and perhaps even friends through a last will and testament. However, anything a person owns can be transferred through estate planning, and cultural definitions of “own” are changing rapidly because of the internet. As the American life span continues to increase, many concerns about estate planning and inheritance from social media accounts to increasing debt, must become part of the estate planning conversation.
Currently, the average 65-year-old adult is healthier than generations past, and is expected to live up to 20 more years. Although this is good news for healthy adults ready to enjoy retirement, it can be bad news for their finances. Many in the Baby Boomer generation now face the question of outliving their retirement fund, social security benefits, and other personal assets – assets that would otherwise be passed to their family through inheritance law and estate planning.
“From a legacy perspective, whether it’s going to children, grandchildren or philanthropy, the question really becomes: will there be anything left?” asks Merrill Lynch advisor Stephen Stabile, senior vice president of Merrill’s Hirsh Stabile Group in New York.
“If you’re living 30 to 40 years into retirement, you’re most likely not going to get the job done with cash and fixed income, or even a small allocation into equities,” says Stabile. “You’re going to need your money to last quite a bit longer.”
Estate planning in earlier adulthood can help prevent some of these pitfalls. Consulting an estate planning attorney to develop a last will and testament, along with any other documents like powers of attorney or living wills, can help if or when the worst case scenarios occur.
The Baby Boomers are also the first generation to have any members retire with access to social media accounts. Although the discussion has already begun with Facebook, Twitter, and Google+ regarding ownership and transference of accounts, inheriting a loved one’s social media passwords and access may become more common in estate planning as Boomers face old age and death, and Generation X and Millennials age into inheritance and eventually their own retirement age.
Facebook and Google+ already have “legacy” or “inactive” page options: in the event that a user dies, a family member or inheritor can access the accounts and change the page so that it becomes a digital memorial to the deceased. Unfortunately, few people yet consider who should be in charge of their social media or blog when they pass away, which means that fights between partners – married or unmarried – and family members could break out over how the deceased’s presence will be handled. Estate planning exists in part to prepare for these disagreements and spell out exact intentions.
“In this day and age, your digital assets should be a part of your estate planning,” says Rick Salmeron, founder of Salmeron Financial in Dallas. “You need to pass on the keys to your digital kingdom.”
As the internet generations age into retirement, all types of property should be considered when making living wills, powers of attorney, and last wills and testaments. And, financial planning for living well into one’s 80’s should be part of the changing conversation.