Millennial Estate Planning Rises
According to a new study conducted by Trust & Will, a digital estate planning platform, three-fourths of millennials have completed a will-based estate plan, enabling them to appoint guardians for minor children, and pets, and be able to make decisions about health care wishes and final arrangements. Trust & Will analyzed data from nearly 23,000 individuals aged 25 to 44 who created estate planning documents in 2021 to help answer questions and offer a glimpse into how millennials think about their legacies. Additionally, they surveyed 323 individuals aged 25 to 44 to ask them about the process of creating their Estate Plans.
The study shows that only 19% of participants opted for a trust, which helps those with more complex estate plans manage and distribute assets in their lifetime and after death. Estate planning continues to see an increase as millennials overtake baby boomers as the largest generation caring for young children and their aging parents.
It's not only the wealthiest millennials who are establishing estate plans.
Seventy-one percent of the study sample had a net worth of $500,000 or less, while just 16% had a net worth of more than $1 million. “Millennials are building their own families while also caring for their aging parents amid a global health crisis, prompting more caregivers to plan for the future,” Cody Barbo, founder, and chief executive of Trust & Will stated. “Even though millennials are taking the lead on writing wills and establishing trusts to set up their families’ financial health, the majority of American adults still do not have any plan in place.”
Why millennials created Estate plans
Thirty-four percent said they created one due to the birth of a child. Eleven percent stated there was a death in the family, and 9% because of a purchase of a home. The pandemic and work-from-home policies convinced many families to adopt a pet. More than half of millennials in the study have a pet, and 77% of pet owners have chosen someone to act as a pet guardian.
While having children is such an important factor for people who decide to work on their end-of-life plans, the date shows that millennials are not going by the traditional family norms. Their closest circle might not necessarily include blood relatives. Nearly one in four of those surveyed said they chose a non-family member as a Guardian for their kids or pets or to act as an Executor, Trustee, or Beneficiary.
Trends in end-of-life planning.
Some 40% of participants said they had completed their health documents, including a HIPAA authorization form, and 57% had elected to receive long-term care only if the benefits outweigh the burdens.
Millennials appear to be opting away from traditional end-of-life arrangements. Fourty-eight percent said they want their body to be cremated, while only a quarter opted for a conventional burial. Eight percent want their body to be donated to science.
Many people put off creating a Will or Trust
Additionally, Trust & Will surveyed 323 individuals aged 25 to 44 to ask them about the process of creating their Estate Plans. Getting emotional thinking about end-of-life plans can be a huge factor in procrastination. When asked how they felt before creating their documents, the most common descriptors millennials used were “overwhelmed” and “anxious.” However, after completing their documents, majority of them felt relieved.
If you want to learn more about estate planning and the process of passing on your legacy to your loved ones download Attorney Michael Monteforte Jr.’s FREE book “Planning Ahead.” There is no better time to plan for the future than now! You will be surprised at how painless our process is and how much better you will feel after getting it done.